The big shareholder groups in Zhangjiagang Haiguo New Energy Equipment Manufacturing Co., Ltd. (SZSE:301063) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Zhangjiagang Haiguo New Energy Equipment Manufacturing is a smaller company with a market capitalization of CN¥2.8b, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about Zhangjiagang Haiguo New Energy Equipment Manufacturing.

See our latest analysis for Zhangjiagang Haiguo New Energy Equipment Manufacturing

What Does The Institutional Ownership Tell Us About Zhangjiagang Haiguo New Energy Equipment Manufacturing?

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.

Zhangjiagang Haiguo New Energy Equipment Manufacturing 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. 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 Zhangjiagang Haiguo New Energy Equipment Manufacturing's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Zhangjiagang Haiguo New Energy Equipment Manufacturing. The company's CEO Xuehua Sheng is the largest shareholder with 39% of shares outstanding. With 12% and 7.8% of the shares outstanding respectively, Tianyu Sheng and Zhangjiagang Yulong Technology Venture Capital Co., Ltd. are the second and third largest shareholders. Interestingly, the second-largest shareholder, Tianyu Sheng is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top 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 51% stake.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Zhangjiagang Haiguo New Energy Equipment Manufacturing

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. 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 information suggests that insiders own more than half of Zhangjiagang Haiguo New Energy Equipment Manufacturing Co., Ltd.. This gives them effective control of the company. So they have a CN¥1.4b stake in this CN¥2.8b business. 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-- including retail investors -- own 24% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 15% stake in Zhangjiagang Haiguo New Energy Equipment Manufacturing. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Zhangjiagang Haiguo New Energy Equipment Manufacturing better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Zhangjiagang Haiguo New Energy Equipment Manufacturing (of which 1 is significant!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.