Private companies in Guangzhou Guanggang Gases & Energy Co.,Ltd. (SHSE:688548) are its biggest bettors, and their bets paid off as stock gained 22% last week

Key Insights

• Significant control over Guangzhou Guanggang Gases & EnergyLtd by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 5 shareholders own 51% of the company
• Institutional ownership in Guangzhou Guanggang Gases & EnergyLtd is 23%

If you want to know who really controls Guangzhou Guanggang Gases & Energy Co.,Ltd. (SHSE:688548), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 44% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies collectively scored the highest last week as the company hit CN¥12b market cap following a 22% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Guangzhou Guanggang Gases & EnergyLtd.

View our latest analysis for Guangzhou Guanggang Gases & EnergyLtd

What Does The Institutional Ownership Tell Us About Guangzhou Guanggang Gases & EnergyLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

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

Guangzhou Guanggang Gases & EnergyLtd is not owned by hedge funds. Guangzhou Industrial Investment Holdings Group is currently the largest shareholder, with 21% of shares outstanding. Guangzhou Iron & Steel Holdings Limited is the second largest shareholder owning 19% of common stock, and Shanghai Xingcheng Investment Management Co., Ltd. holds about 4.3% of the company stock.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Guangzhou Guanggang Gases & EnergyLtd

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 Guangzhou Guanggang Gases & Energy 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 pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around CN¥269k worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 33% stake in the company, and hence can't easily be ignored. 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 44%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Guangzhou Guanggang Gases & EnergyLtd (of which 1 is concerning!) you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.