Ningxia Building Materials Group Co.,Ltd's (SHSE:600449) biggest owners are public companies who got richer after stock soared 10% last week

Key Insights

• Significant control over Ningxia Building Materials GroupLtd by public companies implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 3 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of Ningxia Building Materials Group Co.,Ltd (SHSE:600449) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are public companies with 49% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, public companies collectively scored the highest last week as the company hit CN¥5.3b market cap following a 10% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Ningxia Building Materials GroupLtd.

View our latest analysis for Ningxia Building Materials GroupLtd

What Does The Institutional Ownership Tell Us About Ningxia Building Materials GroupLtd?

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.

Ningxia Building Materials GroupLtd 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Ningxia Building Materials GroupLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Ningxia Building Materials GroupLtd. The company's largest shareholder is China National Building Material Company Limited, with ownership of 49%. In comparison, the second and third largest shareholders hold about 0.7% and 0.6% of the stock.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Ningxia Building Materials GroupLtd

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.

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.

Our information suggests that Ningxia Building Materials Group Co.,Ltd insiders own under 1% of the company. It has a market capitalization of just CN¥5.3b, and the board has only CN¥53m worth of shares in their own names. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 44% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

Public companies currently own 49% of Ningxia Building Materials GroupLtd stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for Ningxia Building Materials GroupLtd 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.