Insiders were the biggest winners as Anhui Honglu Steel Construction(Group) CO., LTD's (SZSE:002541) market cap grew by CN¥639m last week

Key Insights

• Insiders appear to have a vested interest in Anhui Honglu Steel Construction(Group)'s growth, as seen by their sizeable ownership
• The top 2 shareholders own 51% of the company
• Institutional ownership in Anhui Honglu Steel Construction(Group) is 18%

To get a sense of who is truly in control of Anhui Honglu Steel Construction(Group) CO., LTD (SZSE:002541), it is important to understand the ownership structure of the business. With 50% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit CN¥12b market cap following a 5.8% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Anhui Honglu Steel Construction(Group).

See our latest analysis for Anhui Honglu Steel Construction(Group)

What Does The Institutional Ownership Tell Us About Anhui Honglu Steel Construction(Group)?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

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

Hedge funds don't have many shares in Anhui Honglu Steel Construction(Group). Xiaobo Shang is currently the largest shareholder, with 47% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.2% and 2.0%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 Anhui Honglu Steel Construction(Group)

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 a reasonable proportion of Anhui Honglu Steel Construction(Group) CO., LTD. Insiders own CN¥5.7b worth of shares in the CN¥12b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 32% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Anhui Honglu Steel Construction(Group). While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 3 warning signs for Anhui Honglu Steel Construction(Group) (1 is concerning!) 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.