While private companies own 40% of Xinxing Ductile Iron Pipes Co., Ltd. (SZSE:000778), individual investors are its largest shareholders with 48% ownership

Key Insights

• Significant control over Xinxing Ductile Iron Pipes by individual investors implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 20 shareholders
• Institutions own 11% of Xinxing Ductile Iron Pipes

If you want to know who really controls Xinxing Ductile Iron Pipes Co., Ltd. (SZSE:000778), then you'll have to look at the makeup of its share registry. With 48% stake, individual investors 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.

Private companies, on the other hand, account for 40% of the company's stockholders.

In the chart below, we zoom in on the different ownership groups of Xinxing Ductile Iron Pipes.

View our latest analysis for Xinxing Ductile Iron Pipes

What Does The Institutional Ownership Tell Us About Xinxing Ductile Iron Pipes?

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 Xinxing Ductile Iron Pipes. 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 Xinxing Ductile Iron Pipes' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Xinxing Ductile Iron Pipes. Xinxing Cathay International Group Co., Ltd. is currently the company's largest shareholder with 40% of shares outstanding. In comparison, the second and third largest shareholders hold about 2.5% and 1.7% of the stock.

A closer look at our ownership figures suggests that the top 20 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 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 Xinxing Ductile Iron Pipes

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own less than 1% of Xinxing Ductile Iron Pipes Co., Ltd.. But they may have an indirect interest through a corporate structure that we haven't picked up on. Keep in mind that it's a big company, and the insiders own CN¥129m worth of shares. The absolute value might be more important than the proportional share. 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 48% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Xinxing Ductile Iron Pipes. 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

It seems that Private Companies own 40%, of the Xinxing Ductile Iron Pipes stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Xinxing Ductile Iron Pipes better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Xinxing Ductile Iron Pipes you should be aware of.

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.