Key Insights

• Significant control over Xinxing Ductile Iron Pipes by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 25 shareholders own 48% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of Xinxing Ductile Iron Pipes Co., Ltd. (SZSE:000778) 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).

And following last week's 4.4% decline in share price, individual investors suffered the most losses.

Let's delve deeper into each type of owner of Xinxing Ductile Iron Pipes, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Xinxing Ductile Iron Pipes?

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.

Xinxing Ductile Iron Pipes 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 Xinxing Ductile Iron Pipes' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Xinxing Ductile Iron Pipes. The company's largest shareholder is Xinxing Cathay International Group Co., Ltd., with ownership of 40%. The second and third largest shareholders are National Council for Social Security Fund and ICBC Credit Suisse Asset Management Co., Ltd., with an equal amount of shares to their name at 1.8%.

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.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Xinxing Ductile Iron Pipes

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.

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 data suggests that insiders own under 1% of Xinxing Ductile Iron Pipes Co., Ltd. in their own names. However, it's possible that insiders might have an indirect interest through a more complex structure. Keep in mind that it's a big company, and the insiders own CN¥90m worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 52% of Xinxing Ductile Iron Pipes. 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.

Private Company Ownership

It seems that Private Companies own 40%, of the Xinxing Ductile Iron Pipes stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Xinxing Ductile Iron Pipes better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Xinxing Ductile Iron Pipes .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.