Key Insights

• Significant control over Guangdong Huate Gas by private companies implies that the general public has more power to influence management and governance-related decisions
• A total of 5 investors have a majority stake in the company with 54% ownership
• Insider ownership in Guangdong Huate Gas is 22%

If you want to know who really controls Guangdong Huate Gas Co., Ltd (SHSE:688268), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 43% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 5.9% decrease in the stock price last week, private companies suffered the most losses, but insiders who own 22% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Guangdong Huate Gas.

What Does The Institutional Ownership Tell Us About Guangdong Huate Gas?

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.

We can see that Guangdong Huate Gas 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 Guangdong Huate Gas' earnings history below. Of course, the future is what really matters.

Guangdong Huate Gas is not owned by hedge funds. Guangdong Huate Investment Management Co., Ltd. is currently the largest shareholder, with 22% of shares outstanding. In comparison, the second and third largest shareholders hold about 11% and 9.9% of the stock. Pingxiang Shi, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. In addition, we found that Zhuhong Fu, the CEO has 0.9% of the shares allocated to their name.

On looking further, we found that 54% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Guangdong Huate Gas

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 insiders own a significant proportion of Guangdong Huate Gas Co., Ltd. Insiders have a CN¥1.3b stake in this CN¥5.9b business. 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-- including retail investors -- own 22% stake in the company, and hence can't easily be ignored. 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 43%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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 Guangdong Huate Gas you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.