While institutions invested in Xinyi Solar Holdings Limited (HKG:968) benefited from last week's 5.9% gain, retail investors stood to gain the most

Key Insights

• Significant control over Xinyi Solar Holdings by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 7 investors have a majority stake in the company with 51% ownership
• 22% of Xinyi Solar Holdings is held by insiders

A look at the shareholders of Xinyi Solar Holdings Limited (HKG:968) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 30% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Retail investors gained the most after market cap touched HK$34b last week, while institutions who own 24% also benefitted.

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?

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.

Xinyi Solar Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Xinyi Solar Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Xinyi Solar Holdings. Xinyi Glass Holdings Limited is currently the company's largest shareholder with 23% of shares outstanding. With 13% and 4.9% of the shares outstanding respectively, Yin Yee Lee and BlackRock, Inc. are the second and third largest shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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

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 information suggests that insiders maintain a significant holding in Xinyi Solar Holdings Limited. It is very interesting to see that insiders have a meaningful HK$7.5b stake in this HK$34b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public-- including retail investors -- own 30% stake in the company, and hence can't easily be ignored. 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

It appears to us that public companies own 23% of Xinyi Solar Holdings. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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. Case in point: We've spotted 1 warning sign for Xinyi Solar Holdings you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com