Private companies account for 32% of Hengli Petrochemical Co.,Ltd.'s (SHSE:600346) ownership, while institutions account for 29%

Key Insights

• Hengli PetrochemicalLtd's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 2 shareholders own 51% of the company
• Insiders own 22% of Hengli PetrochemicalLtd

If you want to know who really controls Hengli Petrochemical Co.,Ltd. (SHSE:600346), then you'll have to look at the makeup of its share registry. With 32% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, institutions make up 29% of the company’s shareholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.

Let's delve deeper into each type of owner of Hengli PetrochemicalLtd, beginning with the chart below.

View our latest analysis for Hengli PetrochemicalLtd

What Does The Institutional Ownership Tell Us About Hengli PetrochemicalLtd?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Hengli PetrochemicalLtd. 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 Hengli PetrochemicalLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Hengli PetrochemicalLtd. Looking at our data, we can see that the largest shareholder is Suzhou Zhongkun Investment Co., Ltd. with 30% of shares outstanding. In comparison, the second and third largest shareholders hold about 22% and 21% of the stock. Hongwei Fan, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Hengli PetrochemicalLtd

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Hengli Petrochemical Co.,Ltd.. Insiders own CN¥23b worth of shares in the CN¥108b 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

With a 18% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hengli PetrochemicalLtd. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 32%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Hengli PetrochemicalLtd better, we need to consider many other factors. For example, we've discovered 2 warning signs for Hengli PetrochemicalLtd (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

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

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.