CEO Huodong Ye, Longyan Zhuoyue New Energy Co., Ltd.'s (SHSE:688196) largest shareholder sees value of holdings go down 12% after recent drop

Key Insights

• Longyan Zhuoyue New Energy's significant insider ownership suggests inherent interests in company's expansion
• 75% of the company is held by a single shareholder (Huodong Ye)
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Longyan Zhuoyue New Energy Co., Ltd. (SHSE:688196) can tell us which group is most powerful. The group holding the most number of shares in the company, around 75% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders as a group endured the highest losses after market cap fell by CN¥383m.

Let's delve deeper into each type of owner of Longyan Zhuoyue New Energy, beginning with the chart below.

See our latest analysis for Longyan Zhuoyue New Energy

What Does The Institutional Ownership Tell Us About Longyan Zhuoyue New Energy?

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.

Longyan Zhuoyue New Energy 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. 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 Longyan Zhuoyue New Energy'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 Longyan Zhuoyue New Energy. Looking at our data, we can see that the largest shareholder is the CEO Huodong Ye with 75% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. Meanwhile, the second and third largest shareholders, hold 2.0% and 1.6%, of the shares outstanding, respectively.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Longyan Zhuoyue New Energy

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. 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.

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 the majority of Longyan Zhuoyue New Energy Co., Ltd.. This means they can collectively make decisions for the company. That means they own CN¥2.1b worth of shares in the CN¥2.8b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 19% stake in Longyan Zhuoyue New Energy. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Longyan Zhuoyue New Energy better, we need to consider many other factors. To that end, you should be aware of the 4 warning signs we've spotted with Longyan Zhuoyue New Energy .

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