Key Insights

• Insiders appear to have a vested interest in Zhuhai Enpower ElectricLtd's growth, as seen by their sizeable ownership
• 51% of the business is held by the top 7 shareholders
• Institutional ownership in Zhuhai Enpower ElectricLtd is 15%

Every investor in Zhuhai Enpower Electric Co.,Ltd. (SZSE:300681) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 44% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 10% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Zhuhai Enpower ElectricLtd.

See our latest analysis for Zhuhai Enpower ElectricLtd

What Does The Institutional Ownership Tell Us About Zhuhai Enpower ElectricLtd?

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.

We can see that Zhuhai Enpower ElectricLtd does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Zhuhai Enpower ElectricLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Zhuhai Enpower ElectricLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Guibin Jiang with 29% of shares outstanding. Hongyu Li is the second largest shareholder owning 8.4% of common stock, and Biao Wei holds about 4.3% of the company stock. Two of the top three shareholders happen to be Senior Key Executive and Member of the Board of Directors, respectively. That is, insiders feature higher up in the heirarchy of the company's top 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.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Zhuhai Enpower ElectricLtd

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. 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.

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.

It seems insiders own a significant proportion of Zhuhai Enpower Electric Co.,Ltd.. Insiders have a CN¥1.7b stake in this CN¥3.9b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 37% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zhuhai Enpower ElectricLtd. 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.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Zhuhai Enpower ElectricLtd (at least 1 which is significant) , and understanding them should be part of your investment process.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.