Kailuan Energy Chemical Co.,Ltd.'s (SHSE:600997) biggest owners are private companies who got richer after stock soared 5.3% last week

Key Insights

• Significant control over Kailuan Energy ChemicalLtd by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 69% of the company
• 14% of Kailuan Energy ChemicalLtd is held by Institutions

To get a sense of who is truly in control of Kailuan Energy Chemical Co.,Ltd. (SHSE:600997), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 48% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, private companies benefitted the most after the company's market cap rose by CN¥587m last week.

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

View our latest analysis for Kailuan Energy ChemicalLtd

What Does The Institutional Ownership Tell Us About Kailuan Energy ChemicalLtd?

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 Kailuan Energy ChemicalLtd. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Kailuan Energy ChemicalLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Kailuan Energy ChemicalLtd. The company's largest shareholder is Kailuan (Group) Limited Liability Corporation, with ownership of 48%. Meanwhile, the second and third largest shareholders, hold 21% and 4.5%, of the shares outstanding, respectively.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Kailuan Energy ChemicalLtd

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.

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.

We note our data does not show any board members holding shares, personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kailuan Energy ChemicalLtd. 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.

Private Company Ownership

We can see that Private Companies own 48%, of the shares on issue. 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.

Public Company Ownership

Public companies currently own 21% of Kailuan Energy ChemicalLtd 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Kailuan Energy ChemicalLtd better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Kailuan Energy ChemicalLtd .

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.

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.