Retail investors account for 53% of China Northern Rare Earth (Group) High-Tech Co.,Ltd's (SHSE:600111) ownership, while private companies account for 41%

Key Insights

• Significant control over China Northern Rare Earth (Group) High-TechLtd by retail investors implies that the general public has more power to influence management and governance-related decisions
• 46% of the business is held by the top 25 shareholders
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of China Northern Rare Earth (Group) High-Tech Co.,Ltd (SHSE:600111), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 53% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Private companies, on the other hand, account for 41% of the company's stockholders.

Let's take a closer look to see what the different types of shareholders can tell us about China Northern Rare Earth (Group) High-TechLtd.

See our latest analysis for China Northern Rare Earth (Group) High-TechLtd

What Does The Institutional Ownership Tell Us About China Northern Rare Earth (Group) High-TechLtd?

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.

China Northern Rare Earth (Group) High-TechLtd 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 China Northern Rare Earth (Group) High-TechLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in China Northern Rare Earth (Group) High-TechLtd. Baotou Steel (Group) Co., Ltd. is currently the company's largest shareholder with 37% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.3% and 0.8%, of the shares outstanding, respectively.

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.

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

Insider Ownership Of China Northern Rare Earth (Group) High-TechLtd

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 China Northern Rare Earth (Group) High-Tech Co.,Ltd insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own CN¥4.0m worth of shares (at current prices). In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 53% of China Northern Rare Earth (Group) High-TechLtd 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 Company Ownership

It seems that Private Companies own 41%, of the China Northern Rare Earth (Group) High-TechLtd stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - China Northern Rare Earth (Group) High-TechLtd 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.