Institutions along with private companies who hold considerable shares inShandong Hi-Speed Holdings Group Limited (HKG:412) come under pressure; lose 16% of holdings value

Key Insights

• Significant control over Shandong Hi-Speed Holdings Group by private companies implies that the general public has more power to influence management and governance-related decisions
• A total of 2 investors have a majority stake in the company with 69% ownership
• Institutions own 29% of Shandong Hi-Speed Holdings Group

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To get a sense of who is truly in control of Shandong Hi-Speed Holdings Group Limited (HKG:412), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 43% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 16% decrease in the stock price last week, private companies suffered the most losses, but institutions who own 29% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Shandong Hi-Speed Holdings Group.

See our latest analysis for Shandong Hi-Speed Holdings Group

What Does The Institutional Ownership Tell Us About Shandong Hi-Speed Holdings Group?

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.

We can see that Shandong Hi-Speed Holdings Group does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Shandong Hi-Speed Holdings Group, (below). Of course, keep in mind that there are other factors to consider, too.

Shandong Hi-Speed Holdings Group is not owned by hedge funds. Shandong High-Speed Group Co., Ltd. is currently the largest shareholder, with 43% of shares outstanding. With 25% and 2.0% of the shares outstanding respectively, Harvest Fund Management Co. Ltd. and HFT Investment Management Co. Ltd. (Group) are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 69% stake.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Shandong Hi-Speed Holdings Group

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.

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.

We note our data does not show any board members holding shares, personally. We do not see this low level of ownership often, and it is possible our data is imperfect. But shareholders can click here to check if insiders have been selling stock.

General Public Ownership

The general public-- including retail investors -- own 28% stake in the company, and hence can't easily be ignored. 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

It seems that Private Companies own 43%, of the Shandong Hi-Speed Holdings Group stock. 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 Shandong Hi-Speed Holdings Group better, we need to consider many other factors. Be aware that Shandong Hi-Speed Holdings Group is showing 4 warning signs in our investment analysis , and 3 of those don't sit too well with us...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.