Key Insights

• Sieyuan Electric's significant insider ownership suggests inherent interests in company's expansion
• A total of 12 investors have a majority stake in the company with 50% ownership
• Institutional ownership in Sieyuan Electric is 32%

To get a sense of who is truly in control of Sieyuan Electric Co., Ltd. (SZSE:002028), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 35% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.

Let's delve deeper into each type of owner of Sieyuan Electric, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Sieyuan Electric?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Sieyuan Electric. 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. 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 Sieyuan Electric, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Sieyuan Electric. The company's CEO Zeng Ping Dong is the largest shareholder with 17% of shares outstanding. In comparison, the second and third largest shareholders hold about 12% and 3.3% of the stock. Interestingly, the second-largest shareholder, Bang Dong Chen is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 12 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Sieyuan Electric

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.

It seems insiders own a significant proportion of Sieyuan Electric Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥20b stake in this CN¥57b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sieyuan Electric. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sieyuan Electric better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Sieyuan Electric you should know about.

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.