Henan Shenhuo Coal Industry and Electricity Power Co. Ltd's (SZSE:000933) last week's 5.8% decline must have disappointed individual investors who have a significant stake

Key Insights

• Significant control over Henan Shenhuo Coal Industry and Electricity Power by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 13 shareholders own 50% of the company
• 26% of Henan Shenhuo Coal Industry and Electricity Power is held by Institutions

To get a sense of who is truly in control of Henan Shenhuo Coal Industry and Electricity Power Co. Ltd (SZSE:000933), it is important to understand the ownership structure of the business. With 41% 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.

And following last week's 5.8% decline in share price, individual investors suffered the most losses.

Let's delve deeper into each type of owner of Henan Shenhuo Coal Industry and Electricity Power, beginning with the chart below.

Check out our latest analysis for Henan Shenhuo Coal Industry and Electricity Power

What Does The Institutional Ownership Tell Us About Henan Shenhuo Coal Industry and Electricity Power?

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.

We can see that Henan Shenhuo Coal Industry and Electricity Power does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Henan Shenhuo Coal Industry and Electricity Power's historic earnings and revenue below, but keep in mind there's always more to the story.

Henan Shenhuo Coal Industry and Electricity Power is not owned by hedge funds. Henan Shenhuo Group Co., Ltd. is currently the company's largest shareholder with 21% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.5% and 3.7% of the stock.

A closer look at our ownership figures suggests that the top 13 shareholders have a combined ownership of 50% implying that 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 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 Henan Shenhuo Coal Industry and Electricity Power

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.

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 Henan Shenhuo Coal Industry and Electricity Power Co. Ltd. But they may have an indirect interest through a corporate structure that we haven't picked up on. 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¥32m worth of shares. 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

The general public, who are usually individual investors, hold a 41% stake in Henan Shenhuo Coal Industry and Electricity Power. 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

Our data indicates that Private Companies hold 34%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Henan Shenhuo Coal Industry and Electricity Power better, we need to consider many other factors. Be aware that Henan Shenhuo Coal Industry and Electricity Power is showing 1 warning sign in our investment analysis , 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.

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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.