CEVIA Enviro Inc.'s (SZSE:000885) largest shareholders are private equity firms who were rewarded as market cap surged CN¥533m last week

Key Insights

• The considerable ownership by private equity firms in CEVIA Enviro indicates that they collectively have a greater say in management and business strategy
• Henan Investment Group Co.,Ltd owns 56% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of CEVIA Enviro Inc. (SZSE:000885) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private equity firms with 56% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private equity firms collectively scored the highest last week as the company hit CN¥8.5b market cap following a 6.7% gain in the stock.

In the chart below, we zoom in on the different ownership groups of CEVIA Enviro.

See our latest analysis for CEVIA Enviro

What Does The Institutional Ownership Tell Us About CEVIA Enviro?

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.

CEVIA Enviro already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 CEVIA Enviro, (below). Of course, keep in mind that there are other factors to consider, too.

CEVIA Enviro is not owned by hedge funds. Henan Investment Group Co.,Ltd is currently the largest shareholder, with 56% of shares outstanding. This implies that they have majority interest control of the future of the company. China National Building Material Company Limited is the second largest shareholder owning 9.7% of common stock, and Great Wall Life Insurance Co., Ltd, Asset Management Arm holds about 6.0% of the company stock.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of CEVIA Enviro

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.

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 data cannot confirm that board members are holding shares personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

The general public-- including retail investors -- own 24% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With an ownership of 56%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Public Company Ownership

Public companies currently own 9.7% of CEVIA Enviro stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for CEVIA Enviro (of which 1 is concerning!) you should know about.

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.