Key Insights

• Significant control over Shanghai Mechanical & Electrical IndustryLtd by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 51% of the company
• Institutional ownership in Shanghai Mechanical & Electrical IndustryLtd is 15%

A look at the shareholders of Shanghai Mechanical & Electrical Industry Co.,Ltd. (SHSE:600835) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 48% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies as a group endured the highest losses last week after market cap fell by CN¥614m.

Let's delve deeper into each type of owner of Shanghai Mechanical & Electrical IndustryLtd, beginning with the chart below.

View our latest analysis for Shanghai Mechanical & Electrical IndustryLtd

What Does The Institutional Ownership Tell Us About Shanghai Mechanical & Electrical IndustryLtd?

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.

Shanghai Mechanical & Electrical IndustryLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Shanghai Mechanical & Electrical IndustryLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Shanghai Mechanical & Electrical IndustryLtd. The company's largest shareholder is Shanghai Electric (Group) Corporation, with ownership of 48%. For context, the second largest shareholder holds about 2.6% of the shares outstanding, followed by an ownership of 2.4% by the third-largest shareholder.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Shanghai Mechanical & Electrical IndustryLtd

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.

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 data cannot confirm that board members are holding shares personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

With a 37% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shanghai Mechanical & Electrical IndustryLtd. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 48%, of the company's shares. 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:

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

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.