Xinjiang Xinxin Mining Industry Co., Ltd.'s (HKG:3833) stock price dropped 12% last week; private companies would not be happy

Key Insights

• The considerable ownership by private companies in Xinjiang Xinxin Mining Industry indicates that they collectively have a greater say in management and business strategy
• 53% of the business is held by the top 2 shareholders
• 13% of Xinjiang Xinxin Mining Industry is held by insiders

To get a sense of who is truly in control of Xinjiang Xinxin Mining Industry Co., Ltd. (HKG:3833), it is important to understand the ownership structure of the business. With 49% stake, private companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private companies as a group endured the highest losses last week after market cap fell by HK$221m.

Let's delve deeper into each type of owner of Xinjiang Xinxin Mining Industry, beginning with the chart below.

See our latest analysis for Xinjiang Xinxin Mining Industry

What Does The Lack Of Institutional Ownership Tell Us About Xinjiang Xinxin Mining Industry?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

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. Xinjiang Xinxin Mining Industry might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Xinjiang Xinxin Mining Industry is not owned by hedge funds. Our data shows that Xinjiang NonFerrous Metal Industry (Group) Co.Ltd is the largest shareholder with 40% of shares outstanding. With 13% and 9.0% of the shares outstanding respectively, Chuanyou Zhou and Zhongjin Investment (Group) Ltd. are the second and third largest shareholders.

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.

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

Insider Ownership Of Xinjiang Xinxin Mining Industry

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Xinjiang Xinxin Mining Industry Co., Ltd.. It has a market capitalization of just HK$1.7b, and insiders have HK$212m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. 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 35% stake in Xinjiang Xinxin Mining Industry. 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

We can see that Private Companies own 49%, of the shares on issue. 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 Xinjiang Xinxin Mining Industry better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Xinjiang Xinxin Mining Industry you should be aware of, and 1 of them is a bit concerning.

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.