Key Insights

• Shanghai Kelai Mechatronics EngineeringLtd's significant insider ownership suggests inherent interests in company's expansion
• The top 5 shareholders own 51% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Shanghai Kelai Mechatronics Engineering Co.,Ltd. (SHSE:603960) should be aware of the most powerful shareholder groups. With 43% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥786m last week.

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

What Does The Institutional Ownership Tell Us About Shanghai Kelai Mechatronics EngineeringLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Shanghai Kelai Mechatronics EngineeringLtd does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Shanghai Kelai Mechatronics EngineeringLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Shanghai Kelai Mechatronics EngineeringLtd is not owned by hedge funds. The company's CEO Shi Li Tan is the largest shareholder with 22% of shares outstanding. In comparison, the second and third largest shareholders hold about 16% and 6.1% of the stock.

On looking further, we found that 51% 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 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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Shanghai Kelai Mechatronics EngineeringLtd

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. 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 Kelai Mechatronics Engineering Co.,Ltd.. Insiders own CN¥2.5b worth of shares in the CN¥5.9b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 41% stake in Shanghai Kelai Mechatronics EngineeringLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.