Key Insights

• The considerable ownership by public companies in Ningxia Building Materials GroupLtd indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 3 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Ningxia Building Materials Group Co.,Ltd (SHSE:600449), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are public companies with 49% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, public companies endured the biggest losses as the stock fell by 5.3%.

Let's delve deeper into each type of owner of Ningxia Building Materials GroupLtd, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Ningxia Building Materials GroupLtd?

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.

Ningxia Building Materials GroupLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Ningxia Building Materials GroupLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Ningxia Building Materials GroupLtd. China National Building Material Company Limited is currently the largest shareholder, with 49% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 0.7% and 0.6%, of the shares outstanding, respectively.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 50% 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. 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 Ningxia Building Materials GroupLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Ningxia Building Materials Group Co.,Ltd insiders own under 1% of the company. It has a market capitalization of just CN¥6.6b, and the board has only CN¥65m worth of shares in their own names. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public-- including retail investors -- own 44% 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.

Public Company Ownership

Public companies currently own 49% of Ningxia Building Materials GroupLtd stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

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. For instance, we've identified 3 warning signs for Ningxia Building Materials GroupLtd that you should be aware of.

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.