Key Insights

• Significant control over Shanghai Haixin Group by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 25 shareholders own 46% of the company
• Institutions own 19% of Shanghai Haixin Group

If you want to know who really controls Shanghai Haixin Group Co., Ltd. (SHSE:600851), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 54% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, retail investors benefitted the most after the company's market cap rose by CN¥954m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Shanghai Haixin Group.

What Does The Institutional Ownership Tell Us About Shanghai Haixin Group?

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.

As you can see, institutional investors have a fair amount of stake in Shanghai Haixin Group. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Shanghai Haixin Group, (below). Of course, keep in mind that there are other factors to consider, too.

Shanghai Haixin Group is not owned by hedge funds. Hunan Ningrui Investment Partnership Enterprise (Limited Partnership) is currently the largest shareholder, with 12% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 6.8% and 5.0%, of the shares outstanding, respectively.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. 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 Haixin Group

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.

We can see that insiders own shares in Shanghai Haixin Group Co., Ltd.. It has a market capitalization of just CN¥6.1b, and insiders have CN¥145m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 54% of Shanghai Haixin Group shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

Our data indicates that Private Companies hold 24%, of the company's shares. 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 Haixin Group has 1 warning sign 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.

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.