Key Insights

• Guangdong Huate Gas' significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 5 investors have a majority stake in the company with 53% ownership
• 22% of Guangdong Huate Gas is held by insiders

To get a sense of who is truly in control of Guangdong Huate Gas Co., Ltd (SHSE:688268), it is important to understand the ownership structure of the business. With 41% stake, private companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, private companies benefitted the most after the company's market cap rose by CN¥444m last week.

In the chart below, we zoom in on the different ownership groups of Guangdong Huate Gas.

What Does The Institutional Ownership Tell Us About Guangdong Huate Gas?

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.

Guangdong Huate Gas 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. 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 Guangdong Huate Gas' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Guangdong Huate Gas. The company's largest shareholder is Guangdong Huate Investment Management Co., Ltd., with ownership of 22%. Tianjin Huahong Investment Management Partnership Enterprise (Limited Partnership) is the second largest shareholder owning 10% of common stock, and Pingxiang Shi holds about 9.9% of the company stock. Pingxiang Shi, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. Furthermore, CEO Zhuhong Fu is the owner of 0.8% of the company's shares.

On looking further, we found that 53% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in 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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Guangdong Huate Gas

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own a reasonable proportion of Guangdong Huate Gas Co., Ltd. Insiders have a CN¥1.2b stake in this CN¥5.3b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 25% stake in Guangdong Huate Gas. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 41%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Guangdong Huate Gas better, we need to consider many other factors. For example, we've discovered 1 warning sign for Guangdong Huate Gas that you should be aware of before investing here.

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.