Baowu Magnesium Technology Co., Ltd.'s (SZSE:002182) largest shareholders are individual investors who were rewarded as market cap surged CN¥963m last week

Key Insights

• Significant control over Baowu Magnesium Technology by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 25 investors have a majority stake in the company with 50% ownership
• 17% of Baowu Magnesium Technology is held by insiders

Every investor in Baowu Magnesium Technology Co., Ltd. (SZSE:002182) should be aware of the most powerful shareholder groups. With 50% 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.

As a result, individual investors were the biggest beneficiaries of last week’s 7.6% gain.

Let's delve deeper into each type of owner of Baowu Magnesium Technology, beginning with the chart below.

Check out our latest analysis for Baowu Magnesium Technology

What Does The Institutional Ownership Tell Us About Baowu Magnesium Technology?

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.

Baowu Magnesium Technology 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 Baowu Magnesium Technology's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Baowu Magnesium Technology. China Baowu Steel Group Co.,Ltd is currently the company's largest shareholder with 22% of shares outstanding. For context, the second largest shareholder holds about 16% of the shares outstanding, followed by an ownership of 2.7% by the third-largest shareholder. Xiaoming Mei, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Baowu Magnesium Technology

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Baowu Magnesium Technology Co., Ltd.. It has a market capitalization of just CN¥14b, and insiders have CN¥2.3b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 50% of Baowu Magnesium Technology shares. 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

Our data indicates that Private Companies hold 22%, 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 Baowu Magnesium Technology better, we need to consider many other factors. Take risks for example - Baowu Magnesium Technology has 4 warning signs (and 2 which are significant) we think you should know about.

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.

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.