Hexing Electrical Co.,Ltd. (SHSE:603556) stock most popular amongst private companies who own 57%, while individual investors hold 20%

Key Insights

• Hexing ElectricalLtd's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 56% of the company is held by a single shareholder (Zhejiang Haixing Holding Group Co., Ltd.)
• 11% of Hexing ElectricalLtd is held by insiders

If you want to know who really controls Hexing Electrical Co.,Ltd. (SHSE:603556), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 57% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And individual investors on the other hand have a 20% ownership in the company.

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

View our latest analysis for Hexing ElectricalLtd

What Does The Institutional Ownership Tell Us About Hexing ElectricalLtd?

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.

Hexing ElectricalLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Hexing ElectricalLtd, (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 Hexing ElectricalLtd. Our data shows that Zhejiang Haixing Holding Group Co., Ltd. is the largest shareholder with 56% of shares outstanding. This implies that they have majority interest control of the future of the company. With 8.8% and 2.3% of the shares outstanding respectively, Xiao Qing Li and Liangzhang Zhou are the second and third largest shareholders. Interestingly, the bottom two of the top three shareholders also hold the title of Chief Financial Officer and Chairman of the Board, respectively, suggesting that these insiders have a personal stake in the company.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Hexing ElectricalLtd

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.

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 Hexing Electrical Co.,Ltd.. It is very interesting to see that insiders have a meaningful CN¥2.0b stake in this CN¥18b business. 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

With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hexing ElectricalLtd. 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

We can see that Private Companies own 57%, of the shares on issue. 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 Hexing ElectricalLtd better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Hexing ElectricalLtd you should know about.

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.