Key Insights

• The considerable ownership by private companies in Shanghai Mechanical & Electrical IndustryLtd indicates that they collectively have a greater say in management and business strategy
• The top 2 shareholders own 50% of the company
• Institutional ownership in Shanghai Mechanical & Electrical IndustryLtd is 11%

Every investor in Shanghai Mechanical & Electrical Industry Co.,Ltd. (SHSE:600835) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 48% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, private companies endured the biggest losses as the stock fell by 8.3%.

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.

As you can see, institutional investors have a fair amount of stake in Shanghai Mechanical & Electrical IndustryLtd. 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. 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 Shanghai Mechanical & Electrical IndustryLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Shanghai Mechanical & Electrical IndustryLtd. Looking at our data, we can see that the largest shareholder is Shanghai Electric Holding Group Co., Ltd. with 48% of shares outstanding. For context, the second largest shareholder holds about 2.4% of the shares outstanding, followed by an ownership of 1.2% by the third-largest shareholder.

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 50% stake.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Shanghai Mechanical & Electrical IndustryLtd

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our data cannot confirm that board members are holding shares personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

The general public, who are usually individual investors, hold a 41% stake in 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

We can see that Private Companies own 48%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private 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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Shanghai Mechanical & Electrical IndustryLtd (of which 1 is significant!) you should know about.

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.

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