Key Insights

• Significant control over Hunan Baili Engineering Sci&TechLtd by individual 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 14% of Hunan Baili Engineering Sci&TechLtd

If you want to know who really controls Hunan Baili Engineering Sci&Tech Co.,Ltd (SHSE:603959), then you'll have to look at the makeup of its share registry. With 54% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, individual investors collectively scored the highest last week as the company hit CN¥3.0b market cap following a 16% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Hunan Baili Engineering Sci&TechLtd.

What Does The Institutional Ownership Tell Us About Hunan Baili Engineering Sci&TechLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Hunan Baili Engineering Sci&TechLtd. 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 Hunan Baili Engineering Sci&TechLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Hunan Baili Engineering Sci&TechLtd. Hunan Haixin Investment Co., Ltd. is currently the company's largest shareholder with 30% of shares outstanding. Shanghai Axing Investment Management Co., Ltd. is the second largest shareholder owning 5.0% of common stock, and Shanghai Tuopai Asset Management Co., Ltd. holds about 2.4% of the company stock.

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 Hunan Baili Engineering Sci&TechLtd

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.

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.

Our most recent data indicates that insiders own some shares in Hunan Baili Engineering Sci&Tech Co.,Ltd. As individuals, the insiders collectively own CN¥55m worth of the CN¥3.0b company. 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 Hunan Baili Engineering Sci&TechLtd shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Equity Ownership

With an ownership of 30%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Hunan Baili Engineering Sci&TechLtd , and understanding them should be part of your investment process.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.