Key Insights

• Significant insider control over Ningbo Dechang Electrical Machinery Made implies vested interests in company growth
• 56% of the business is held by the top 3 shareholders
• 11% of Ningbo Dechang Electrical Machinery Made is held by Institutions

To get a sense of who is truly in control of Ningbo Dechang Electrical Machinery Made Co., Ltd. (SHSE:605555), it is important to understand the ownership structure of the business. With 42% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 4.9% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of Ningbo Dechang Electrical Machinery Made, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Ningbo Dechang Electrical Machinery Made?

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.

Ningbo Dechang Electrical Machinery Made 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. 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 Ningbo Dechang Electrical Machinery Made, (below). Of course, keep in mind that there are other factors to consider, too.

Ningbo Dechang Electrical Machinery Made is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Yuchang Huang with 24% of shares outstanding. For context, the second largest shareholder holds about 20% of the shares outstanding, followed by an ownership of 12% by the third-largest shareholder. Interestingly, the third-largest shareholder, Liying Zhang is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Ningbo Dechang Electrical Machinery Made

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Ningbo Dechang Electrical Machinery Made Co., Ltd.. Insiders own CN¥3.4b worth of shares in the CN¥8.0b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 25% stake in the company, and hence can't easily be ignored. 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

It seems that Private Companies own 21%, of the Ningbo Dechang Electrical Machinery Made 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 Ningbo Dechang Electrical Machinery Made better, we need to consider many other factors. Be aware that Ningbo Dechang Electrical Machinery Made is showing 2 warning signs in our investment analysis , and 1 of those is potentially serious...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

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.