Key Insights

• The considerable ownership by private companies in China Automotive Engineering Research Institute indicates that they collectively have a greater say in management and business strategy
• 53% of the company is held by a single shareholder (China Certification & Inspection (Group) Co.,Ltd.)
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of China Automotive Engineering Research Institute Co., Ltd. (SHSE:601965) can tell us which group is most powerful. We can see that private companies own the lion's share in the company with 54% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, private companies endured the biggest losses as the stock fell by 4.5%.

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

View 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.

China Automotive Engineering Research Institute already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 China Automotive Engineering Research Institute's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in China Automotive Engineering Research Institute. China Certification & Inspection (Group) Co.,Ltd. is currently the largest shareholder, with 53% of shares outstanding. This implies that they have majority interest control of the future of the company. With 9.0% and 2.0% of the shares outstanding respectively, Aerospace Science & Industry Asset Management Co., Ltd. and ICBC Credit Suisse Asset Management Co., Ltd. are the second and third largest shareholders.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of China Automotive Engineering Research Institute

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.. The insiders have a meaningful stake worth CN¥320m. Most would see this as a real positive. Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

With a 27% ownership, the general public, mostly comprising of individual investors, have some degree of sway over China Automotive Engineering Research Institute. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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

We can see that Private Companies own 54%, of the shares on issue. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 1 warning sign for China Automotive Engineering Research Institute you should be aware of.

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.

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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.