Shan Xi Hua Yang Group New Energy Co.,Ltd.'s (SHSE:600348) market cap dropped CN¥1.5b last week; Private companies bore the brunt

Key Insights

• The considerable ownership by private companies in Shan Xi Hua Yang Group New EnergyLtd indicates that they collectively have a greater say in management and business strategy
• Shanxi State-owned Capital Operation Co., Ltd. owns 56% of the company
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

Every investor in Shan Xi Hua Yang Group New Energy Co.,Ltd. (SHSE:600348) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 56% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 4.0% decline in share price, private companies suffered the most losses.

Let's delve deeper into each type of owner of Shan Xi Hua Yang Group New EnergyLtd, beginning with the chart below.

Check out our latest analysis for Shan Xi Hua Yang Group New EnergyLtd

What Does The Institutional Ownership Tell Us About Shan Xi Hua Yang Group New EnergyLtd?

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.

Shan Xi Hua Yang Group New EnergyLtd 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 Shan Xi Hua Yang Group New EnergyLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Shan Xi Hua Yang Group New EnergyLtd. The company's largest shareholder is Shanxi State-owned Capital Operation Co., Ltd., with ownership of 56%. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 0.9% of the shares outstanding, followed by an ownership of 0.5% by the third-largest shareholder.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Shan Xi Hua Yang Group New EnergyLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that Shan Xi Hua Yang Group New Energy Co.,Ltd. insiders own under 1% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around CN¥168k worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 37% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shan Xi Hua Yang Group New EnergyLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 56%, of the Shan Xi Hua Yang Group New EnergyLtd stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the 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. To that end, you should be aware of the 1 warning sign we've spotted with Shan Xi Hua Yang Group New EnergyLtd .

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com