Individual investors own 35% of China Everbright Environment Group Limited (HKG:257) shares but private companies control 43% of the company

Key Insights

• The considerable ownership by private companies in China Everbright Environment Group indicates that they collectively have a greater say in management and business strategy
• The top 3 shareholders own 51% of the company
• Institutions own 21% of China Everbright Environment Group

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To get a sense of who is truly in control of China Everbright Environment Group Limited (HKG:257), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 43% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Individual investors, on the other hand, account for 35% of the company's stockholders.

Let's take a closer look to see what the different types of shareholders can tell us about China Everbright Environment Group.

See our latest analysis for China Everbright Environment Group

What Does The Institutional Ownership Tell Us About China Everbright Environment Group?

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 China Everbright Environment Group. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at China Everbright Environment Group's earnings history below. Of course, the future is what really matters.

China Everbright Environment Group is not owned by hedge funds. Our data shows that China Everbright Group Ltd. is the largest shareholder with 43% of shares outstanding. Pacific Asset Management Co., Ltd. is the second largest shareholder owning 5.9% of common stock, and Shanghai Orient Securities Asset Management Co., Ltd. holds about 2.5% of the company stock.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of China Everbright Environment Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 most recent data indicates that insiders own less than 1% of China Everbright Environment Group Limited. But they may have an indirect interest through a corporate structure that we haven't picked up on. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around HK$55m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over China Everbright Environment Group. 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 43%, of the China Everbright Environment Group 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 China Everbright Environment Group better, we need to consider many other factors. Take risks for example - China Everbright Environment Group has 3 warning signs (and 1 which is potentially serious) we think you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.