Private companies among Hexing Electrical Co.,Ltd.'s (SHSE:603556) largest shareholders, saw gain in holdings value after stock jumped 3.6% last week

Key Insights

• The considerable ownership by private companies in Hexing ElectricalLtd indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Zhejiang Haixing Holding Group Co., Ltd. with a 56% stake
• 11% of Hexing ElectricalLtd is held by insiders

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Every investor in Hexing Electrical Co.,Ltd. (SHSE:603556) should be aware of the most powerful shareholder groups. With 57% stake, private companies possess the maximum shares in the company. 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, private companies were the biggest beneficiaries of last week’s 3.6% gain.

In the chart below, we zoom in on the different ownership groups of Hexing ElectricalLtd.

Check out our latest analysis for Hexing ElectricalLtd

What Does The Institutional Ownership Tell Us About Hexing ElectricalLtd?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Hexing ElectricalLtd. 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.

Hexing ElectricalLtd is not owned by hedge funds. Our data shows that Zhejiang Haixing Holding Group Co., Ltd. is the largest shareholder with 56% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 8.8% and 2.3% of the shares outstanding respectively, Xiao Qing Li and Liangzhang Zhou are the second and third largest shareholders. Note that the second and third-largest shareholders are also Chief Financial Officer and Chairman of the Board, respectively, meaning that the company's top shareholders are insiders.

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 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.

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.. Insiders own CN¥1.8b worth of shares in the CN¥17b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

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

It seems that Private Companies own 57%, of the Hexing ElectricalLtd 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. 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.