Yankuang Energy Group Company Limited's (HKG:1171) market cap dropped HK$3.2b last week; Private companies bore the brunt

Key Insights

• Significant control over Yankuang Energy Group by private companies implies that the general public has more power to influence management and governance-related decisions
• The largest shareholder of the company is Shan Dong Energy Group Co., Ltd. with a 53% stake
• Institutions own 11% of Yankuang Energy Group

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If you want to know who really controls Yankuang Energy Group Company Limited (HKG:1171), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 54% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies as a group endured the highest losses last week after market cap fell by HK$3.2b.

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

View our latest analysis for Yankuang Energy Group

What Does The Institutional Ownership Tell Us About Yankuang Energy Group?

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.

As you can see, institutional investors have a fair amount of stake in Yankuang Energy Group. 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. 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 Yankuang Energy Group, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Yankuang Energy Group. The company's largest shareholder is Shan Dong Energy Group Co., Ltd., with ownership of 53%. This implies that they have majority interest control of the future of the company. Meanwhile, the second and third largest shareholders, hold 1.5% and 1.3%, of the shares outstanding, respectively.

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 Yankuang Energy Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 Yankuang Energy Group Company Limited insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own HK$76m of stock. Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 35% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 54%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Yankuang Energy Group better, we need to consider many other factors. For example, we've discovered 3 warning signs for Yankuang Energy Group (1 is potentially serious!) that you should be aware of before investing here.

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.