Key Insights

• Significant insider control over Chengdu Haoneng Technology implies vested interests in company growth
• The top 7 shareholders own 53% of the company
• 14% of Chengdu Haoneng Technology is held by Institutions

To get a sense of who is truly in control of Chengdu Haoneng Technology Co., Ltd. (SHSE:603809), 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 55% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 9.5% decline in share price, insiders suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Chengdu Haoneng Technology.

What Does The Institutional Ownership Tell Us About Chengdu Haoneng Technology?

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 Chengdu Haoneng Technology 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 Chengdu Haoneng Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Chengdu Haoneng Technology. Our data shows that Chao Dong Xiang is the largest shareholder with 18% of shares outstanding. In comparison, the second and third largest shareholders hold about 10% and 6.9% of the stock. Furthermore, CEO Zhang Yong is the owner of 4.3% of the company's shares.

We did some more digging and found that 7 of the top shareholders account for roughly 53% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Chengdu Haoneng Technology

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders own more than half of Chengdu Haoneng Technology Co., Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥4.4b, that means they have CN¥2.4b worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 30% stake in the company, and hence can't easily be ignored. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Chengdu Haoneng Technology better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Chengdu Haoneng Technology you should know about.

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.

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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.

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