Private companies are Shanxi Coking Co., Ltd.'s (SHSE:600740) biggest owners and were rewarded after market cap rose by CN¥589m last week

Key Insights

• The considerable ownership by private companies in Shanxi Coking indicates that they collectively have a greater say in management and business strategy
• Shanxi Jiao Hua Group Co., Ltd. owns 51% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Shanxi Coking Co., Ltd. (SHSE:600740), then you'll have to look at the makeup of its share registry. With 57% stake, private companies possess the maximum shares in the company. 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 collectively scored the highest last week as the company hit CN¥10b market cap following a 6.2% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Shanxi Coking.

See our latest analysis for Shanxi Coking

What Does The Institutional Ownership Tell Us About Shanxi Coking?

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 Shanxi Coking. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Shanxi Coking, (below). Of course, keep in mind that there are other factors to consider, too.

Shanxi Coking is not owned by hedge funds. Our data shows that Shanxi Jiao Hua Group Co., Ltd. is the largest shareholder with 51% of shares outstanding. This implies that they have majority interest control of the future of the company. With 5.8% and 3.3% of the shares outstanding respectively, Shanxi State-owned Capital Operation Co., Ltd. and Shanghai Junrong Investment Management Co., Ltd. are the second and third largest shareholders.

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. 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 Shanxi Coking

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.

Our information suggests that Shanxi Coking Co., Ltd. insiders own under 1% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own CN¥281k worth of shares. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

With a 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shanxi Coking. 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

We can see that Private Companies own 57%, of the shares on issue. 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 Shanxi Coking better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Shanxi Coking (of which 1 is significant!) you should know about.

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.

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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.