Zheng Yong State Power Rixin Technology Co., Ltd.'s (SZSE:301162) CEO is the most bullish insider, and their stock value gained 18%last week

Key Insights

• Insiders appear to have a vested interest in State Power Rixin Technology's growth, as seen by their sizeable ownership
• A total of 5 investors have a majority stake in the company with 51% ownership
• 19% of State Power Rixin Technology is held by Institutions

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. The group holding the most number of shares in the company, around 45% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit CN¥3.7b market cap following a 18% gain in the stock.

In the chart below, we zoom in on the different ownership groups of State Power Rixin Technology.

Check out 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.

State Power Rixin Technology 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 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. For context, the second largest shareholder holds about 9.0% of the shares outstanding, followed by an ownership of 6.5% by the third-largest shareholder.

On looking further, we found that 51% of the shares are owned by the top 5 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. 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 company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 State Power Rixin Technology Co., Ltd.. Insiders have a CN¥1.6b stake in this CN¥3.7b business. 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 30% stake in State Power Rixin Technology. 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 Company Ownership

It seems that Private Companies own 6.5%, of the State Power Rixin Technology stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand State Power Rixin Technology better, we need to consider many other factors. Take risks for example - State Power Rixin Technology has 2 warning signs we think you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.