- Huadian Power International's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
- A total of 2 investors have a majority stake in the company with 52% ownership
- 16% of Huadian Power International is held by Institutions
Every investor in Huadian Power International Corporation Limited (HKG:1071) should be aware of the most powerful shareholder groups. 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).
Meanwhile, individual investors make up 31% of the company’s shareholders.
Let's take a closer look to see what the different types of shareholders can tell us about Huadian Power International.
What Does The Institutional Ownership Tell Us About Huadian Power International?
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.
Huadian Power International already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Huadian Power International's earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Huadian Power International. Our data shows that China Huadian Corporation Ltd. is the largest shareholder with 45% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.5% and 3.5% of the stock.
After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Huadian Power International
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our data cannot confirm that board members are holding shares personally. It is rare to see such a low level of personal ownership, amongst the board (and it is possible that our data might be incomplete). Concerned investors should check here to see if insiders have been selling or buying.
General Public Ownership
The general public, who are usually individual investors, hold a 31% stake in Huadian Power International. 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.
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.
While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 4 warning signs we've spotted with Huadian Power International (including 2 which are potentially serious) .
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.
Huadian Power International
Huadian Power International Corporation Limited, together with its subsidiaries, engages in the generation and sale of electricity, heat, and coal to power grid companies in the People’s Republic of China.
Moderate growth potential and slightly overvalued.