Hoyuan Green Energy Co., Ltd.'s (SHSE:603185) top holders are insiders and they are likely disappointed by the recent 7.6% drop

Key Insights

• Insiders appear to have a vested interest in Hoyuan Green Energy's growth, as seen by their sizeable ownership
• The top 5 shareholders own 52% of the company
• Institutions own 17% of Hoyuan Green Energy

A look at the shareholders of Hoyuan Green Energy Co., Ltd. (SHSE:603185) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 43% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, insiders endured the biggest losses as the stock fell by 7.6%.

In the chart below, we zoom in on the different ownership groups of Hoyuan Green Energy.

See our latest analysis for Hoyuan Green Energy

What Does The Institutional Ownership Tell Us About Hoyuan Green Energy?

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.

As you can see, institutional investors have a fair amount of stake in Hoyuan Green Energy. 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. 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 Hoyuan Green Energy's historic earnings and revenue below, but keep in mind there's always more to the story.

Hoyuan Green Energy is not owned by hedge funds. The company's largest shareholder is Jianliang Yang, with ownership of 29%. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 4.7% by the third-largest shareholder. Additionally, the company's CEO Hao Yang directly holds 0.7% of the total shares outstanding.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Hoyuan Green Energy

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.

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.

It seems insiders own a significant proportion of Hoyuan Green Energy Co., Ltd.. Insiders own CN¥4.8b worth of shares in the CN¥11b 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

The general public-- including retail investors -- own 37% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Hoyuan Green Energy , and understanding them should be part of your investment process.

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.