Individual investors are Henan Shenhuo Coal Industry and Electricity Power Co. Ltd's (SZSE:000933) biggest owners and were hit after market cap dropped CN¥4.1b

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
• A total of 14 investors have a majority stake in the company with 50% ownership
• 23% of Henan Shenhuo Coal Industry and Electricity Power is held by Institutions

If you want to know who really controls Henan Shenhuo Coal Industry and Electricity Power Co. Ltd (SZSE:000933), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 44% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 9.8% decline in share price, individual investors suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Henan Shenhuo Coal Industry and Electricity Power.

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.

Henan Shenhuo Coal Industry and Electricity Power already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Henan Shenhuo Coal Industry and Electricity Power's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Henan Shenhuo Coal Industry and Electricity Power. Our data shows that Henan Shenhuo Group Co., Ltd. is the largest shareholder with 21% of shares outstanding. Shangqiu Putian Industry and Trade Co., Ltd. is the second largest shareholder owning 8.5% of common stock, and National Council for Social Security Fund holds about 3.6% of the company stock.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 14 shareholders, meaning that no single shareholder has a majority interest in the ownership.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

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.

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 most recent data indicates that insiders own less than 1% of Henan Shenhuo Coal Industry and Electricity Power Co. Ltd. However, it's possible that insiders might have an indirect interest through a more complex 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¥47m worth of shares (at current prices). 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-- including retail investors -- own 44% stake in the company, and hence can't easily be ignored. 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

We can see that Private Companies own 34%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. For example, we've discovered 1 warning sign for Henan Shenhuo Coal Industry and Electricity Power that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com