Key Insights

• Shanghai Hugong Electric GroupLtd's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 53% of the business is held by the top 4 shareholders
• Insiders own 42% of Shanghai Hugong Electric GroupLtd

If you want to know who really controls Shanghai Hugong Electric Group Co.,Ltd. (SHSE:603131), then you'll have to look at the makeup of its share registry. We can see that retail investors own the lion's share in the company with 44% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders, who own 42% shares weren't spared from last week's CN¥499m market cap drop, retail investors as a group suffered the maximum losses

Let's delve deeper into each type of owner of Shanghai Hugong Electric GroupLtd, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Shanghai Hugong Electric GroupLtd?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Since institutions own only a small portion of Shanghai Hugong Electric GroupLtd, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in Shanghai Hugong Electric GroupLtd. The company's CEO Zhen Yu Shu is the largest shareholder with 21% of shares outstanding. Hong Rui Shu is the second largest shareholder owning 20% of common stock, and Shanghai Mingxin Commercial Co., Ltd. holds about 8.0% of the company stock.

Our research also brought to light the fact that roughly 53% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. 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 Shanghai Hugong Electric GroupLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Our most recent data indicates that insiders own a reasonable proportion of Shanghai Hugong Electric Group Co.,Ltd.. Insiders own CN¥1.8b worth of shares in the CN¥4.4b 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

The general public, who are usually individual investors, hold a 44% stake in Shanghai Hugong Electric GroupLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 12%, 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Shanghai Hugong Electric GroupLtd has 2 warning signs we think you should be aware of.

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.