Key Insights
- Huadian Power International's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
- 52% of the business is held by the top 2 shareholders
- 19% of Huadian Power International is held by Institutions
Every investor in Huadian Power International Corporation Limited (HKG:1071) should be aware of the most powerful shareholder groups. With 54% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
As market cap fell to HK$59b last week, private companies would have faced the highest losses than any other shareholder groups of the company.
In the chart below, we zoom in on the different ownership groups of Huadian Power International.
See our latest analysis for Huadian Power International
What Does The Institutional Ownership Tell Us About Huadian Power International?
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.
We can see that Huadian Power International does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Huadian Power International's earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Huadian Power International. Our data shows that China Huadian Corporation Ltd. is the largest shareholder with 45% of shares outstanding. With 6.5% and 2.4% of the shares outstanding respectively, Shandong Development & Investment Holding Group Co.,Ltd and China Securities Finance Corp, Asset Management Arm are the second and third largest shareholders.
A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.
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 Huadian Power International
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.
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.
We note our data does not show any board members holding shares, personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to take a look at this free summary of insider buying and selling.
General Public Ownership
With a 27% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Huadian Power International. 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 54%, of the Huadian Power International stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Huadian Power International better, we need to consider many other factors. For instance, we've identified 2 warning signs for Huadian Power International (1 can't be ignored) that you should be aware of.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.