Key Insights

• Significant insider control over Bafang Electric (Suzhou)Ltd implies vested interests in company growth
• The top 2 shareholders own 57% of the company
• Institutions own 12% of Bafang Electric (Suzhou)Ltd

To get a sense of who is truly in control of Bafang Electric (Suzhou) Co.,Ltd. (SHSE:603489), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 65% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by CN¥721m last week.

Let's delve deeper into each type of owner of Bafang Electric (Suzhou)Ltd, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Bafang Electric (Suzhou)Ltd?

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 Bafang Electric (Suzhou)Ltd does have institutional investors; and they hold a good portion of the company's stock. 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 Bafang Electric (Suzhou)Ltd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Bafang Electric (Suzhou)Ltd. Looking at our data, we can see that the largest shareholder is the CEO Qinghua Wang with 40% of shares outstanding. For context, the second largest shareholder holds about 16% of the shares outstanding, followed by an ownership of 8.6% by the third-largest shareholder. Interestingly, the second and third-largest shareholders also happen to be the Senior Key Executive and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company's top 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 57% stake.

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

Insider Ownership Of Bafang Electric (Suzhou)Ltd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems that insiders own more than half the Bafang Electric (Suzhou) Co.,Ltd. stock. This gives them a lot of power. So they have a CN¥3.9b stake in this CN¥6.0b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 15% stake in Bafang Electric (Suzhou)Ltd. 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

We can see that Private Companies own 7.5%, of the shares on issue. 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:

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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Bafang Electric (Suzhou)Ltd (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.