Xinjiang Daqo New Energy Co.,Ltd.'s (SHSE:688303) market cap touched CN¥43b last week, benefiting both public companies who own 73% as well as institutions

Key Insights

• Xinjiang Daqo New EnergyLtd's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 73% of the company is held by a single shareholder (Daqo New Energy Corp.)
• Institutions own 12% of Xinjiang Daqo New EnergyLtd

A look at the shareholders of Xinjiang Daqo New Energy Co.,Ltd. (SHSE:688303) can tell us which group is most powerful. The group holding the most number of shares in the company, around 73% to be precise, is public companies. Put another way, the group faces the maximum upside potential (or downside risk).

While public companies were the group that benefitted the most from last week’s CN¥1.4b market cap gain, institutions too had a 12% share in those profits.

Let's take a closer look to see what the different types of shareholders can tell us about Xinjiang Daqo New EnergyLtd.

See our latest analysis for Xinjiang Daqo New EnergyLtd

What Does The Institutional Ownership Tell Us About Xinjiang Daqo New EnergyLtd?

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.

Xinjiang Daqo New EnergyLtd 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 Xinjiang Daqo New EnergyLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Xinjiang Daqo New EnergyLtd is not owned by hedge funds. Daqo New Energy Corp. is currently the largest shareholder, with 73% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. In comparison, the second and third largest shareholders hold about 2.3% and 1.3% of the stock. Furthermore, CEO Xiang Xu is the owner of 0.9% of the company's shares.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Xinjiang Daqo New EnergyLtd

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.

Our most recent data indicates that insiders own some shares in Xinjiang Daqo New Energy Co.,Ltd.. This is a big company, so it is good to see this level of alignment. Insiders own CN¥1.4b worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 11% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 73% of the Xinjiang Daqo New EnergyLtd shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Xinjiang Daqo New EnergyLtd better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Xinjiang Daqo New EnergyLtd (including 1 which is a bit unpleasant) .

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.