While private companies own 40% of Xinxing Ductile Iron Pipes Co., Ltd. (SZSE:000778), retail investors are its largest shareholders with 52% ownership

Key Insights

• The considerable ownership by retail investors in Xinxing Ductile Iron Pipes indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 48% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Xinxing Ductile Iron Pipes Co., Ltd. (SZSE:000778), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And private companies on the other hand have a 40% ownership in the company.

Let's delve deeper into each type of owner of Xinxing Ductile Iron Pipes, beginning with the chart below.

Check out our latest analysis for Xinxing Ductile Iron Pipes

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

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Xinxing Ductile Iron Pipes does have institutional investors; and they hold a good portion of the company's stock. 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. 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.

We note that hedge funds don't have a meaningful investment in Xinxing Ductile Iron Pipes. Xinxing Cathay International Group Co., Ltd. is currently the largest shareholder, with 40% of shares outstanding. The second and third largest shareholders are National Council for Social Security Fund and ICBC Credit Suisse Asset Management Co., Ltd., with an equal amount of shares to their name at 1.8%.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 Xinxing Ductile Iron Pipes

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

Our most recent data indicates that insiders own less than 1% of Xinxing Ductile Iron Pipes Co., Ltd.. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. 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¥93m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 52% stake in Xinxing Ductile Iron Pipes, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

We can see that Private Companies own 40%, 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 2 warning signs we've spotted with Xinxing Ductile Iron Pipes .

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.