CEO Zheng Yong, State Power Rixin Technology Co., Ltd.'s (SZSE:301162) largest shareholder sees value of holdings go down 9.4% after recent drop

Key Insights

• Significant insider control over State Power Rixin Technology implies vested interests in company growth
• The top 6 shareholders own 51% of the company
• Institutional ownership in State Power Rixin Technology is 13%

To get a sense of who is truly in control of State Power Rixin Technology Co., Ltd. (SZSE:301162), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 44% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 9.4% decline in share price, insiders suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about State Power Rixin Technology.

See our latest analysis for State Power Rixin Technology

What Does The Institutional Ownership Tell Us About State Power Rixin Technology?

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 State Power Rixin Technology 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. 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 State Power Rixin Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in State Power Rixin Technology. With a 27% stake, CEO Zheng Yong is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 9.0% and 6.5%, of the shares outstanding, respectively.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of State Power Rixin Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders maintain a significant holding in State Power Rixin Technology Co., Ltd.. Insiders have a CN¥1.9b stake in this CN¥4.3b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over State Power Rixin Technology. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 6.5%, of the State Power Rixin Technology stock. 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:

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. Case in point: We've spotted 3 warning signs for State Power Rixin Technology you should be aware of, and 1 of them is a bit concerning.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.