Individual investors own 37% of Inner Mongolia MengDian HuaNeng Thermal Power Corporation Limited (SHSE:600863) shares but private companies control 51% of the company

Key Insights

• Significant control over Inner Mongolia MengDian HuaNeng Thermal Power by private companies implies that the general public has more power to influence management and governance-related decisions
• China Huaneng Group Co., Ltd. owns 51% of the company
• 12% of Inner Mongolia MengDian HuaNeng Thermal Power is held by Institutions

A look at the shareholders of Inner Mongolia MengDian HuaNeng Thermal Power Corporation Limited (SHSE:600863) can tell us which group is most powerful. The group holding the most number of shares in the company, around 51% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

And individual investors on the other hand have a 37% ownership in the company.

In the chart below, we zoom in on the different ownership groups of Inner Mongolia MengDian HuaNeng Thermal Power.

See our latest analysis for Inner Mongolia MengDian HuaNeng Thermal Power

What Does The Institutional Ownership Tell Us About Inner Mongolia MengDian HuaNeng Thermal Power?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Inner Mongolia MengDian HuaNeng Thermal Power 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. 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 Inner Mongolia MengDian HuaNeng Thermal Power's historic earnings and revenue below, but keep in mind there's always more to the story.

Inner Mongolia MengDian HuaNeng Thermal Power is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is China Huaneng Group Co., Ltd. with 51% of shares outstanding. This implies that they have majority interest control of the future of the company. With 2.0% and 1.3% of the shares outstanding respectively, Tianjin Huaren Investment Management Co., Ltd. and GF Fund Management Co., Ltd. are the second and third largest shareholders.

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

Insider Ownership Of Inner Mongolia MengDian HuaNeng Thermal Power

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. 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.

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.

We note our data does not show any board members holding shares, personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

With a 37% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Inner Mongolia MengDian HuaNeng Thermal Power. 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 51%, of the Inner Mongolia MengDian HuaNeng Thermal Power 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 Inner Mongolia MengDian HuaNeng Thermal Power better, we need to consider many other factors. For instance, we've identified 1 warning sign for Inner Mongolia MengDian HuaNeng Thermal Power that you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com