China Automotive Engineering Research Institute Co., Ltd.’s (SHSE:601965) top owners are private companies with 54% stake, while 27% is held by individual investors

Key Insights

• Significant control over China Automotive Engineering Research Institute by private companies implies that the general public has more power to influence management and governance-related decisions
• China Certification & Inspection (Group) Co.,Ltd. owns 53% of the company
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls China Automotive Engineering Research Institute Co., Ltd. (SHSE:601965), then you’ll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 54% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Individual investors, on the other hand, account for 27% of the company’s stockholders.

Let’s take a closer look to see what the different types of shareholders can tell us about China Automotive Engineering Research Institute.

See our latest analysis for China Automotive Engineering Research Institute

What Does The Institutional Ownership Tell Us About China Automotive Engineering Research Institute?

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 companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in China Automotive Engineering Research Institute. 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. 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 China Automotive Engineering Research Institute, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don’t have a meaningful investment in China Automotive Engineering Research Institute. China Certification & Inspection (Group) Co.,Ltd. is currently the company’s largest shareholder with 53% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. In comparison, the second and third largest shareholders hold about 9.0% and 1.2% of the stock.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of China Automotive Engineering Research Institute

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 China Automotive Engineering Research Institute Co., Ltd.. This is a big company, so it is good to see this level of alignment. Insiders own CN¥177m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public– including retail investors — own 27% stake in the company, and hence can’t easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

With a stake of 9.0%, private equity firms could influence the China Automotive Engineering Research Institute board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

Our data indicates that Private Companies hold 54%, of the company’s shares. 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 China Automotive Engineering Research Institute better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we’ve spotted with China Automotive Engineering Research Institute .

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.

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.