Ningbo Dechang Electrical Machinery Made Co., Ltd. (SHSE:605555) CEO Yuchang Huang, the company's largest shareholder sees 4.7% reduction in holdings value

Key Insights

• Significant insider control over Ningbo Dechang Electrical Machinery Made implies vested interests in company growth
• A total of 3 investors have a majority stake in the company with 56% ownership
• 10% of Ningbo Dechang Electrical Machinery Made is held by Institutions

Every investor in Ningbo Dechang Electrical Machinery Made Co., Ltd. (SHSE:605555) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 42% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 4.7% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of Ningbo Dechang Electrical Machinery Made, beginning with the chart below.

View our latest analysis for Ningbo Dechang Electrical Machinery Made

What Does The Institutional Ownership Tell Us About Ningbo Dechang Electrical Machinery Made?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Ningbo Dechang Electrical Machinery Made already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Ningbo Dechang Electrical Machinery Made's earnings history below. Of course, the future is what really matters.

Ningbo Dechang Electrical Machinery Made is not owned by hedge funds. With a 24% stake, CEO Yuchang Huang is the largest shareholder. Changshuo (Ningbo) Enterprise Management Co., Ltd. is the second largest shareholder owning 20% of common stock, and Liying Zhang holds about 12% of the company stock. Interestingly, the third-largest shareholder, Liying Zhang is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Ningbo Dechang Electrical Machinery Made

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own a reasonable proportion of Ningbo Dechang Electrical Machinery Made Co., Ltd.. It has a market capitalization of just CN¥8.8b, and insiders have CN¥3.7b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 26% stake in Ningbo Dechang Electrical Machinery Made. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 21%, of the Ningbo Dechang Electrical Machinery Made stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Ningbo Dechang Electrical Machinery Made better, we need to consider many other factors. Be aware that Ningbo Dechang Electrical Machinery Made is showing 2 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.