Insiders were the key beneficiaries as Zhangjiagang Haiguo New Energy Equipment Manufacturing Co., Ltd.'s (SZSE:301063) market cap rises to CN¥1.9b

Key Insights

• Zhangjiagang Haiguo New Energy Equipment Manufacturing's significant insider ownership suggests inherent interests in company's expansion
• The top 4 shareholders own 53% of the company
• Institutional ownership in Zhangjiagang Haiguo New Energy Equipment Manufacturing is 21%

If you want to know who really controls Zhangjiagang Haiguo New Energy Equipment Manufacturing Co., Ltd. (SZSE:301063), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 43% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥408m last week.

Let's delve deeper into each type of owner of Zhangjiagang Haiguo New Energy Equipment Manufacturing, beginning with the chart below.

Check out our latest analysis for Zhangjiagang Haiguo New Energy Equipment Manufacturing

What Does The Institutional Ownership Tell Us About Zhangjiagang Haiguo New Energy Equipment Manufacturing?

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.

Zhangjiagang Haiguo New Energy Equipment Manufacturing already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Zhangjiagang Haiguo New Energy Equipment Manufacturing's historic earnings and revenue below, but keep in mind there's always more to the story.

Zhangjiagang Haiguo New Energy Equipment Manufacturing is not owned by hedge funds. The company's largest shareholder is Xuehua Sheng, with ownership of 32%. With 10.0% and 6.3% of the shares outstanding respectively, Tianyu Sheng and Zhangjiagang Yulong Technology Venture Capital Co., Ltd. are the second and third largest shareholders. Tianyu Sheng, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

On looking further, we found that 53% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Zhangjiagang Haiguo New Energy Equipment Manufacturing

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.

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 information suggests that insiders maintain a significant holding in Zhangjiagang Haiguo New Energy Equipment Manufacturing Co., Ltd.. It has a market capitalization of just CN¥1.9b, and insiders have CN¥807m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 29% stake in Zhangjiagang Haiguo New Energy Equipment Manufacturing. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Equity Ownership

With a stake of 6.3%, private equity firms could influence the Zhangjiagang Haiguo New Energy Equipment Manufacturing board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Zhangjiagang Haiguo New Energy Equipment Manufacturing is showing 5 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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