Anhui Jinhe Industrial Co.,Ltd.'s (SZSE:002597) stock price dropped 3.8% last week; private companies would not be happy

Key Insights

• The considerable ownership by private companies in Anhui Jinhe IndustrialLtd indicates that they collectively have a greater say in management and business strategy
• The top 5 shareholders own 51% of the company
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

To get a sense of who is truly in control of Anhui Jinhe Industrial Co.,Ltd. (SZSE:002597), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 46% ownership. 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 3.8% decline in share price, private companies suffered the most losses.

Let's delve deeper into each type of owner of Anhui Jinhe IndustrialLtd, beginning with the chart below.

View our latest analysis for Anhui Jinhe IndustrialLtd

What Does The Institutional Ownership Tell Us About Anhui Jinhe IndustrialLtd?

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.

We can see that Anhui Jinhe IndustrialLtd does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Anhui Jinhe IndustrialLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Anhui Jinhe IndustrialLtd is not owned by hedge funds. Our data shows that Anhui Jinrui Investment Group Co., Ltd. is the largest shareholder with 46% of shares outstanding. Bank of Communications Schroder Fund Management Co., Ltd. is the second largest shareholder owning 1.9% of common stock, and GF Fund Management Co., Ltd. holds about 1.2% of the company stock.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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 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 Anhui Jinhe IndustrialLtd

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

We can report that insiders do own shares in Anhui Jinhe Industrial Co.,Ltd.. The insiders have a meaningful stake worth CN¥279m. Most would see this as a real positive. If you would like to explore the question of insider alignment, 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 Anhui Jinhe IndustrialLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 46%, of the shares on issue. 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 Anhui Jinhe IndustrialLtd better, we need to consider many other factors. For instance, we've identified 2 warning signs for Anhui Jinhe IndustrialLtd that you should be aware of.

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.

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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.