Private companies in China Three Gorges Renewables (Group) Co.,Ltd. (SHSE:600905) are its biggest bettors, and their bets paid off as stock gained 4.9% last week

Key Insights

• The considerable ownership by private companies in China Three Gorges Renewables (Group)Ltd indicates that they collectively have a greater say in management and business strategy
• The top 2 shareholders own 53% of the company
• Institutional ownership in China Three Gorges Renewables (Group)Ltd is 14%

To get a sense of who is truly in control of China Three Gorges Renewables (Group) Co.,Ltd. (SHSE:600905), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies with 59% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies were the biggest beneficiaries of last week’s 4.9% gain.

Let's delve deeper into each type of owner of China Three Gorges Renewables (Group)Ltd, beginning with the chart below.

View our latest analysis for China Three Gorges Renewables (Group)Ltd

What Does The Institutional Ownership Tell Us About China Three Gorges Renewables (Group)Ltd?

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.

China Three Gorges Renewables (Group)Ltd already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 China Three Gorges Renewables (Group)Ltd'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 China Three Gorges Renewables (Group)Ltd. China Three Gorges Corporation is currently the company's largest shareholder with 49% of shares outstanding. The second and third largest shareholders are Zhejiang Energy Capital Holdings Co., Ltd. and China Green Development Investment Group Co., Ltd., with an equal amount of shares to their name at 3.5%.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of 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 China Three Gorges Renewables (Group)Ltd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 China Three Gorges Renewables (Group) Co.,Ltd. insiders own under 1% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own CN¥14m of stock. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 25% stake in China Three Gorges Renewables (Group)Ltd. 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

Our data indicates that Private Companies hold 59%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand China Three Gorges Renewables (Group)Ltd better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with China Three Gorges Renewables (Group)Ltd (including 1 which doesn't sit too well with us) .

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.

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