In the wake of Xinyi Solar Holdings Limited's (HKG:968) latest HK$10b market cap drop, institutional owners may be forced to take severe actions

A look at the shareholders of Xinyi Solar Holdings Limited (HKG:968) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 32% ownership. 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, institutional investors endured the highest losses last week after market cap fell by HK$10b. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 44% for shareholders. Often called “market makers”, institutions wield significant power in influencing the price dynamics of any stock. As a result, if the decline continues, institutional investors may be pressured to sell Xinyi Solar Holdings which might hurt individual investors.

In the chart below, we zoom in on the different ownership groups of Xinyi Solar Holdings.

View our latest analysis for Xinyi Solar Holdings

What Does The Institutional Ownership Tell Us About Xinyi Solar Holdings?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Xinyi Solar Holdings. 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 Xinyi Solar Holdings' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Xinyi Solar Holdings. The company's largest shareholder is Xinyi Glass Holdings Limited, with ownership of 23%. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 5.0% by the third-largest shareholder. Yin Yee Lee, who is the second-largest shareholder, also happens to hold the title of Top Key Executive. Additionally, the company's CEO Yau Ching Lee directly holds 3.6% of the total shares outstanding.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 Xinyi Solar 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. 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.

Our most recent data indicates that insiders own a reasonable proportion of Xinyi Solar Holdings Limited. It has a market capitalization of just HK$107b, and insiders have HK$28b worth of shares in their own names. That's quite significant. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 19% stake in Xinyi Solar 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.

Public Company Ownership

We can see that public companies hold 23% of the Xinyi Solar Holdings shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Xinyi Solar Holdings better, we need to consider many other factors. For example, we've discovered 2 warning signs for Xinyi Solar Holdings that you should be aware of before investing here.

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.