Risen Energy Co.,Ltd. (SZSE:300118) surges 5.2%; individual investors who own 51% shares profited along with insiders

Key Insights

• The considerable ownership by individual investors in Risen EnergyLtd indicates that they collectively have a greater say in management and business strategy
• 48% of the business is held by the top 25 shareholders
• 25% of Risen EnergyLtd is held by insiders

To get a sense of who is truly in control of Risen Energy Co.,Ltd. (SZSE:300118), it is important to understand the ownership structure of the business. With 51% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While individual investors were the group that benefitted the most from last week’s CN¥628m market cap gain, insiders too had a 25% share in those profits.

Let's delve deeper into each type of owner of Risen EnergyLtd, beginning with the chart below.

View our latest analysis for Risen EnergyLtd

What Does The Institutional Ownership Tell Us About Risen 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.

We can see that Risen EnergyLtd 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Risen EnergyLtd, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Risen EnergyLtd. Looking at our data, we can see that the largest shareholder is Haifeng Lin with 25% of shares outstanding. With 4.4% and 2.3% of the shares outstanding respectively, Guanghua Sunshine Asset Management Co., Ltd. and Shenzhen Hengxin Huaye Equity Investment Fund Management Co., Ltd. are the second and third largest shareholders.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Risen EnergyLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders maintain a significant holding in Risen Energy Co.,Ltd.. It has a market capitalization of just CN¥13b, and insiders have CN¥3.2b worth of shares in their own names. That's quite significant. 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, mostly comprising of individual investors, collectively holds 51% of Risen EnergyLtd shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Risen EnergyLtd has 3 warning signs we think you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free 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.