Private companies in Ningbo Runhe High-Tech Materials Co., Ltd. (SZSE:300727) are its biggest bettors, and their bets paid off as stock gained 13% last week

Key Insights

• Significant control over Ningbo Runhe High-Tech Materials by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 53% of the company
• Insider ownership in Ningbo Runhe High-Tech Materials is 15%

A look at the shareholders of Ningbo Runhe High-Tech Materials Co., Ltd. (SZSE:300727) can tell us which group is most powerful. The group holding the most number of shares in the company, around 48% to be precise, is private companies. 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, private companies collectively scored the highest last week as the company hit CN¥3.7b market cap following a 13% gain in the stock.

Let's delve deeper into each type of owner of Ningbo Runhe High-Tech Materials, beginning with the chart below.

See our latest analysis for Ningbo Runhe High-Tech Materials

What Does The Institutional Ownership Tell Us About Ningbo Runhe High-Tech Materials?

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.

As you can see, institutional investors have a fair amount of stake in Ningbo Runhe High-Tech Materials. 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 Ningbo Runhe High-Tech Materials' historic earnings and revenue below, but keep in mind there's always more to the story.

Ningbo Runhe High-Tech Materials is not owned by hedge funds. Zhejiang Runhe Holding Co., Ltd. is currently the largest shareholder, with 41% of shares outstanding. In comparison, the second and third largest shareholders hold about 12% and 5.7% of the stock. Jianping Ye, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Ningbo Runhe High-Tech Materials

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

It seems insiders own a significant proportion of Ningbo Runhe High-Tech Materials Co., Ltd.. Insiders own CN¥554m worth of shares in the CN¥3.7b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in Ningbo Runhe High-Tech Materials. 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

Our data indicates that Private Companies hold 48%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with Ningbo Runhe High-Tech Materials .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.