Institutions profited after Gree Electric Appliances, Inc. of Zhuhai's (SZSE:000651) market cap rose CN¥6.5b last week but retail investors profited the most

Key Insights

• Significant control over Gree Electric Appliances of Zhuhai by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 25 investors have a majority stake in the company with 41% ownership
• Institutional ownership in Gree Electric Appliances of Zhuhai is 18%

If you want to know who really controls Gree Electric Appliances, Inc. of Zhuhai (SZSE:000651), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 53% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 3.1% increase in the stock price last week, retail investors profited the most, but institutions who own 18% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of Gree Electric Appliances of Zhuhai.

View our latest analysis for Gree Electric Appliances of Zhuhai

What Does The Institutional Ownership Tell Us About Gree Electric Appliances of Zhuhai?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Gree Electric Appliances of Zhuhai does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Gree Electric Appliances of Zhuhai, (below). Of course, keep in mind that there are other factors to consider, too.

Gree Electric Appliances of Zhuhai is not owned by hedge funds. The company's largest shareholder is Hillhouse Investment Management, Ltd., with ownership of 16%. Jinghai Internet Technology Development Co., Ltd. is the second largest shareholder owning 7.0% of common stock, and Zhuhai Gree Group Co.,Ltd holds about 3.5% of the company stock. Furthermore, CEO Ming Zhu Dong is the owner of 1.0% of the company's shares.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Gree Electric Appliances of Zhuhai

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Shareholders would probably be interested to learn that insiders own shares in Gree Electric Appliances, Inc. of Zhuhai. Insiders own CN¥2.5b worth of shares (at current prices). we sometimes take an interest in whether they have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 53% of Gree Electric Appliances of Zhuhai shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Equity Ownership

With an ownership of 16%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

Our data indicates that Private Companies hold 11%, of the company's shares. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - Gree Electric Appliances of Zhuhai has 1 warning sign we think you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

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