Key Insights

• Significant insider control over Himile Mechanical Science and Technology (Shandong) implies vested interests in company growth
• 51% of the business is held by the top 3 shareholders
• Institutions own 13% of Himile Mechanical Science and Technology (Shandong)

To get a sense of who is truly in control of Himile Mechanical Science and Technology (Shandong) Co., Ltd (SZSE:002595), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 57% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.

Let's delve deeper into each type of owner of Himile Mechanical Science and Technology (Shandong), beginning with the chart below.

What Does The Institutional Ownership Tell Us About Himile Mechanical Science and Technology (Shandong)?

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.

We can see that Himile Mechanical Science and Technology (Shandong) 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 Himile Mechanical Science and Technology (Shandong), (below). Of course, keep in mind that there are other factors to consider, too.

Himile Mechanical Science and Technology (Shandong) is not owned by hedge funds. Our data shows that Gongyun Zhang is the largest shareholder with 30% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 6.7% of the stock.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Himile Mechanical Science and Technology (Shandong)

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.

It seems that insiders own more than half the Himile Mechanical Science and Technology (Shandong) Co., Ltd stock. This gives them a lot of power. Given it has a market cap of CN¥33b, that means insiders have a whopping CN¥19b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

With a 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Himile Mechanical Science and Technology (Shandong). 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. For example, we've discovered 1 warning sign for Himile Mechanical Science and Technology (Shandong) that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.