Private companies are Guizhou Panjiang Refined Coal Co.,Ltd.'s (SHSE:600395) biggest owners and were hit after market cap dropped CN¥966m

Key Insights

• Guizhou Panjiang Refined CoalLtd's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 53% of the business is held by the top 3 shareholders
• Institutions own 18% of Guizhou Panjiang Refined CoalLtd

To get a sense of who is truly in control of Guizhou Panjiang Refined Coal Co.,Ltd. (SHSE:600395), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 52% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies as a group endured the highest losses last week after market cap fell by CN¥966m.

Let's delve deeper into each type of owner of Guizhou Panjiang Refined CoalLtd, beginning with the chart below.

See our latest analysis for Guizhou Panjiang Refined CoalLtd

What Does The Institutional Ownership Tell Us About Guizhou Panjiang Refined CoalLtd?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Guizhou Panjiang Refined CoalLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Guizhou Panjiang Refined CoalLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Guizhou Panjiang Refined CoalLtd. Guizhou Energy Group Corporation Limited is currently the largest shareholder, with 45% of shares outstanding. The second and third largest shareholders are Guixin Ruihe Venture Capital Management Co., Ltd. and Guizhou Qiansheng State-Owned Assets Management Co., Ltd., with an equal amount of shares to their name at 3.9%.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Guizhou Panjiang Refined CoalLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

We note our data does not show any board members holding shares, personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

The general public, who are usually individual investors, hold a 30% stake in Guizhou Panjiang Refined CoalLtd. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 52%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Guizhou Panjiang Refined CoalLtd better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Guizhou Panjiang Refined CoalLtd (of which 3 are a bit unpleasant!) you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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