Key Insights

• Significant control over Changzhou Shenli Electrical Machine by individual investors implies that the general public has more power to influence management and governance-related decisions
• 53% of the business is held by the top 4 shareholders
• Insiders own 32% of Changzhou Shenli Electrical Machine

A look at the shareholders of Changzhou Shenli Electrical Machine Incorporated Company (SHSE:603819) can tell us which group is most powerful. With 40% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders who own 32% came under pressure after market cap dropped to CN¥2.5b last week,individual investors took the most losses.

Let's delve deeper into each type of owner of Changzhou Shenli Electrical Machine, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Changzhou Shenli Electrical Machine?

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 Changzhou Shenli Electrical Machine 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. 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 Changzhou Shenli Electrical Machine, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Changzhou Shenli Electrical Machine. Zhongwei Chen is currently the company's largest shareholder with 31% of shares outstanding. Shenzhen Chengtun Industrial Development Co., Ltd. is the second largest shareholder owning 8.5% of common stock, and Shenzhen Qianhai Zhongwu Yifang Enterprise Management Consulting Co., Ltd. holds about 8.0% of the company stock.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Changzhou Shenli Electrical Machine

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Changzhou Shenli Electrical Machine Incorporated Company. Insiders own CN¥790m worth of shares in the CN¥2.5b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Changzhou Shenli Electrical Machine. 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

It seems that Private Companies own 17%, of the Changzhou Shenli Electrical Machine stock. 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.

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. Be aware that Changzhou Shenli Electrical Machine is showing 1 warning sign in our investment analysis , you should know about...

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.