Every investor in China Coal Energy Company Limited (HKG: 1898) should know about the most powerful shareholder groups. Generally speaking, as a business grows, institutions increase their participation. Conversely, insiders often decrease their ownership over time. We also tend to see a decrease in insider ownership in companies that were previously owned by the state.
China Coal Energy is a pretty big company. It has a market capitalization of HK $ 123 billion. Normally, institutions would own a significant share of a company of this size. Looking at our data on ownership groups (below), it appears that institutions own shares in the company. We can zoom in on the different ownership groups, to find out more about China Coal Energy.
See our latest analysis for China Coal Energy
What does institutional ownership tell us about China Coal Energy?
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 businesses to have some institutions listed, especially if they are growing.
As you can see, institutional investors own a large stake in China Coal Energy. This suggests some credibility among professional investors. But we cannot rely on this fact alone because institutions sometimes make bad investments, like everyone else. It is not uncommon to see a sharp drop in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out China Coal Energy’s past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.
Hedge funds don’t have a lot of stock in China Coal Energy. China National Coal Group Corporation is currently the largest shareholder in the company with 58% of the shares outstanding. This implies that they have majority control over the future of the business. With 15% and 2.5% of shares outstanding, respectively, Funde Sino Life Insurance Co., Ltd., Asset Management Arm and China Securities Finance Corp, Asset Management Arm are the second and third largest shareholders.
Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be achieved by studying the feelings of analysts. There are a lot of analysts covering the stock, so you can look at expected growth quite easily.
China Coal Energy insider ownership
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.
Insider ownership is positive when it indicates that executives think like the real owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
Our data suggests that insiders own less than 1% of China Coal Energy Company Limited in their own name. We note, however, that it is possible that insiders may have an indirect interest through a private company or other corporate structure. It’s a very large company, so it would be surprising to see insiders owning a large part of the company. Although their stake is less than 1%, we can see that the board members collectively own HK $ 301 million in shares (at current prices). Arguably recent purchases and sales are just as important to consider. You can click here to see if any insiders have bought or sold.
General public property
With a 20% stake, the general public has some influence over China Coal Energy. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in line with other large shareholders.
Owned by a private company
It appears that private companies own 58% of the shares of China Coal Energy. It may be worth pursuing the question further. If related parties, such as insiders, have an interest in any of these private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the business.
I find it very interesting to see who exactly owns a company. But to really get an overview, we have to take other information into account as well. Take risks for example – China Coal Energy has 4 warning signs (and 1 which is potentially serious) we think you should be aware of.
If you are like me, you might want to ask yourself if this business will grow or shrink. Fortunately, you can check out this free report showing analysts’ forecasts for its future.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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