Key Insights

• Significant control over Xingyuan Environment Technology by individual investors implies that the general public has more power to influence management and governance-related decisions
• 47% of the business is held by the top 22 shareholders
• 24% of Xingyuan Environment Technology is held by insiders

Every investor in Xingyuan Environment Technology Co., Ltd. (SZSE:300266) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 53% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

While individual investors were the group that benefitted the most from last week's CN¥497m market cap gain, insiders too had a 24% share in those profits.

Let's delve deeper into each type of owner of Xingyuan Environment Technology, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Xingyuan Environment Technology?

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.

Xingyuan Environment Technology 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. 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 Xingyuan Environment Technology'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 Xingyuan Environment Technology. Looking at our data, we can see that the largest shareholder is Yonghao Liu with 24% of shares outstanding. In comparison, the second and third largest shareholders hold about 10% and 4.5% of the stock.

On studying our ownership data, we found that 22 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Xingyuan Environment Technology

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.

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.

It seems insiders own a significant proportion of Xingyuan Environment Technology Co., Ltd.. Insiders have a CN¥900m stake in this CN¥3.8b 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 -- including retail investors -- own 53% of Xingyuan Environment Technology. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Xingyuan Environment Technology better, we need to consider many other factors. Be aware that Xingyuan Environment Technology is showing 2 warning signs in our investment analysis , and 1 of those can't be ignored...

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.

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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.