Key Insights

Every investor in Shanghai Yongmaotai Automotive Technology Co., Ltd. (SHSE:605208) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 44% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit CN¥2.6b market cap following a 14% gain in the stock.

Let’s delve deeper into each type of owner of Shanghai Yongmaotai Automotive Technology, beginning with the chart below.

View our latest analysis for Shanghai Yongmaotai Automotive Technology

What Does The Institutional Ownership Tell Us About Shanghai Yongmaotai Automotive Technology?

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.

Shanghai Yongmaotai Automotive Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Shanghai Yongmaotai Automotive Technology’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 Shanghai Yongmaotai Automotive Technology. The company’s CEO Hong Xu is the largest shareholder with 33% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 6.5% and 5.3%, of the shares outstanding, respectively. Interestingly, the third-largest shareholder, Yazhi Xu is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company’s top shareholders.

On looking further, we found that 54% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Shanghai Yongmaotai Automotive Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

It seems insiders own a significant proportion of Shanghai Yongmaotai Automotive Technology Co., Ltd.. It has a market capitalization of just CN¥2.6b, and insiders have CN¥1.2b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 39% stake in Shanghai Yongmaotai Automotive Technology. 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 5.3%, of the Shanghai Yongmaotai Automotive Technology 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 Shanghai Yongmaotai Automotive Technology better, we need to consider many other factors. Case in point: We’ve spotted 3 warning signs for Shanghai Yongmaotai Automotive Technology you should be aware of, and 1 of them shouldn’t be ignored.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.