Key Insights

• Significant control over Ningbo Runhe High-Tech Materials by private companies implies that the general public has more power to influence management and governance-related decisions
• 53% of the business is held by the top 2 shareholders
• Insiders own 15% of Ningbo Runhe High-Tech Materials

If you want to know who really controls Ningbo Runhe High-Tech Materials Co., Ltd. (SZSE:300727), then you'll have to look at the makeup of its share registry. With 48% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, private companies endured the biggest losses as the stock fell by 9.8%.

In the chart below, we zoom in on the different ownership groups of Ningbo Runhe High-Tech Materials.

What Does The Institutional Ownership Tell Us About Ningbo Runhe High-Tech Materials?

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 Ningbo Runhe High-Tech Materials 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Ningbo Runhe High-Tech Materials' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Ningbo Runhe High-Tech Materials. Zhejiang Runhe Holding Co., Ltd. is currently the company's largest shareholder with 41% of shares outstanding. Jianping Ye is the second largest shareholder owning 12% of common stock, and Ninghai Xierun Investment Partnership (Limited Partnership) holds about 5.7% of the company stock. Jianping Ye, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Ningbo Runhe High-Tech Materials

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of Ningbo Runhe High-Tech Materials Co., Ltd.. It has a market capitalization of just CN¥3.4b, and insiders have CN¥500m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in Ningbo Runhe High-Tech Materials. 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

Our data indicates that Private Companies hold 48%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. Case in point: We've spotted 1 warning sign for Ningbo Runhe High-Tech Materials you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.