Key Insights

• The considerable ownership by individual investors in Nanjing Kangni Mechanical & ElectricalLtd indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 47% ownership
• Insider ownership in Nanjing Kangni Mechanical & ElectricalLtd is 18%

A look at the shareholders of Nanjing Kangni Mechanical & Electrical Co.,Ltd (SHSE:603111) can tell us which group is most powerful. The group holding the most number of shares in the company, around 52% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 9.3% increase in the stock price last week, individual investors profited the most, but insiders who own 18% stock also stood to gain from the increase.

Let's take a closer look to see what the different types of shareholders can tell us about Nanjing Kangni Mechanical & ElectricalLtd.

What Does The Institutional Ownership Tell Us About Nanjing Kangni Mechanical & ElectricalLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Nanjing Kangni Mechanical & ElectricalLtd does have institutional investors; and they hold a good portion of the company's stock. 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 Nanjing Kangni Mechanical & ElectricalLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Nanjing Kangni Mechanical & ElectricalLtd is not owned by hedge funds. The company's largest shareholder is Nanjing Institute Of Technology Asset Operating Co., Ltd., with ownership of 9.5%. Nanjing Fengling Equity Investment Fund Management Co., Ltd. is the second largest shareholder owning 4.9% of common stock, and Yuan Gui Jin holds about 4.6% of the company stock. Yuan Gui Jin, who is the third-largest shareholder, also happens to hold the title of Chairman Emeritus. In addition, we found that Wen Ming Gao, the CEO has 2.0% of the shares allocated to their name.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Nanjing Kangni Mechanical & ElectricalLtd

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.

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 information suggests that insiders maintain a significant holding in Nanjing Kangni Mechanical & Electrical Co.,Ltd. Insiders own CN¥906m worth of shares in the CN¥4.9b company. 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, mostly comprising of individual investors, collectively holds 52% of Nanjing Kangni Mechanical & ElectricalLtd shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

We can see that Private Companies own 12%, of the shares on issue. 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 Nanjing Kangni Mechanical & ElectricalLtd better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Nanjing Kangni Mechanical & ElectricalLtd , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.