China Nature Energy Technology Holdings Limited (HKG:1597) Top Key Executive Liquan Cheng, the company's largest shareholder sees 10%reduction in holdings value

Key Insights

• Insiders appear to have a vested interest in China Nature Energy Technology Holdings' growth, as seen by their sizeable ownership
• Liquan Cheng owns 75% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of China Nature Energy Technology Holdings Limited (HKG:1597), it is important to understand the ownership structure of the business. With 75% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to HK$1.8b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of China Nature Energy Technology Holdings, beginning with the chart below.

View our latest analysis for China Nature Energy Technology Holdings

What Does The Lack Of Institutional Ownership Tell Us About China Nature Energy Technology Holdings?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of China Nature Energy Technology Holdings, for yourself, below.

We note that hedge funds don't have a meaningful investment in China Nature Energy Technology Holdings. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In China Nature Energy Technology Holdings' case, its Top Key Executive, Liquan Cheng, is the largest shareholder, holding 75% of shares outstanding.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of China Nature Energy Technology Holdings

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 that insiders own more than half the China Nature Energy Technology Holdings Limited stock. This gives them a lot of power. So they have a HK$1.3b stake in this HK$1.8b business. Most would argue this is a positive, showing strong alignment with shareholders. 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 25% stake in China Nature Energy Technology Holdings. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand China Nature Energy Technology Holdings better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with China Nature Energy Technology Holdings (at least 1 which shouldn't be ignored) , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.