Key Insights

• Insiders appear to have a vested interest in Anhui Honglu Steel Construction(Group)'s growth, as seen by their sizeable ownership
• The top 2 shareholders own 52% of the company
• Institutions own 20% of Anhui Honglu Steel Construction(Group)

Every investor in Anhui Honglu Steel Construction(Group) CO., LTD (SZSE:002541) should be aware of the most powerful shareholder groups. With 49% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders as a group endured the highest losses after market cap fell by CN¥385m.

Let's delve deeper into each type of owner of Anhui Honglu Steel Construction(Group), beginning with the chart below.

What Does The Institutional Ownership Tell Us About Anhui Honglu Steel Construction(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.

Anhui Honglu Steel Construction(Group) already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Anhui Honglu Steel Construction(Group)'s historic earnings and revenue below, but keep in mind there's always more to the story.

Anhui Honglu Steel Construction(Group) is not owned by hedge funds. Our data shows that Xiaobo Shang is the largest shareholder with 47% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.8% and 2.1%, of the shares outstanding, respectively.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Anhui Honglu Steel Construction(Group)

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Our information suggests that insiders maintain a significant holding in Anhui Honglu Steel Construction(Group) CO., LTD. It has a market capitalization of just CN¥9.2b, and insiders have CN¥4.5b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Anhui Honglu Steel Construction(Group). While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Anhui Honglu Steel Construction(Group) better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Anhui Honglu Steel Construction(Group) you should be aware of, and 1 of them can't be ignored.

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.

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