Key Insights

• China Automotive Engineering Research Institute's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The largest shareholder of the company is China Certification & Inspection (Group) Co.,Ltd. with a 53% stake
• Institutional ownership in China Automotive Engineering Research Institute is 11%

To get a sense of who is truly in control of China Automotive Engineering Research Institute Co., Ltd. (SHSE:601965), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 54% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies collectively scored the highest last week as the company hit CN¥21b market cap following a 11% gain in the stock.

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

We can see that China Automotive Engineering Research Institute 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 China Automotive Engineering Research Institute's earnings history below. Of course, the future is what really matters.

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. 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.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Shareholders would probably be interested to learn that insiders own shares in China Automotive Engineering Research Institute Co., Ltd.. The insiders have a meaningful stake worth CN¥342m. Most would see this as a real positive. It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 25% stake in China Automotive Engineering Research Institute. 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

Private equity firms hold a 9.0% stake in China Automotive Engineering Research Institute. This suggests they can be influential in key policy decisions. 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's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for China Automotive Engineering Research Institute you should know about.

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.