Key Insights

• The considerable ownership by private companies in Hunan Yuneng New Energy Battery MaterialLtd indicates that they collectively have a greater say in management and business strategy
• A total of 8 investors have a majority stake in the company with 50% ownership
• Institutions own 22% of Hunan Yuneng New Energy Battery MaterialLtd

To get a sense of who is truly in control of Hunan Yuneng New Energy Battery Material Co.,Ltd. (SZSE:301358), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies with 36% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 5.6% decrease in the stock price last week, private companies suffered the most losses, but institutions who own 22% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Hunan Yuneng New Energy Battery MaterialLtd.

What Does The Institutional Ownership Tell Us About Hunan Yuneng New Energy Battery MaterialLtd?

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.

Hunan Yuneng New Energy Battery MaterialLtd 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 Hunan Yuneng New Energy Battery MaterialLtd'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 Hunan Yuneng New Energy Battery MaterialLtd. Xiangtan Electric Manufacturing Group Co., Ltd. is currently the company's largest shareholder with 10% of shares outstanding. The second and third largest shareholders are Shanghai Jinsheng New Material Technology Co., Ltd. and Contemporary Amperex Technology Co., Limited, with an equal amount of shares to their name at 7.9%.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Hunan Yuneng New Energy Battery MaterialLtd

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

We can see that insiders own shares in Hunan Yuneng New Energy Battery Material Co.,Ltd.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around CN¥905m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 20% stake in Hunan Yuneng New Energy Battery MaterialLtd. 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

We can see that Private Companies own 36%, of the shares on issue. 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.

Public Company Ownership

We can see that public companies hold 18% of the Hunan Yuneng New Energy Battery MaterialLtd shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hunan Yuneng New Energy Battery MaterialLtd better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 5 warning signs with Hunan Yuneng New Energy Battery MaterialLtd (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.

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.