Key Insights

• Significant insider control over Hubei Chaozhuo Aviation Technology implies vested interests in company growth
• The top 4 shareholders own 56% of the company
• Institutional ownership in Hubei Chaozhuo Aviation Technology is 24%

To get a sense of who is truly in control of Hubei Chaozhuo Aviation Technology Co., Ltd. (SHSE:688237), 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 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to CN¥3.5b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Hubei Chaozhuo Aviation Technology.

View our latest analysis for Hubei Chaozhuo Aviation Technology

What Does The Institutional Ownership Tell Us About Hubei Chaozhuo Aviation Technology?

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 Hubei Chaozhuo Aviation Technology 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 Hubei Chaozhuo Aviation Technology's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Hubei Chaozhuo Aviation Technology. Our data suggests that Yihan Li, who is also the company's Senior Key Executive, holds the most number of shares at 23%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. Guangping Li is the second largest shareholder owning 16% of common stock, and Chunxiao Wang holds about 11% of the company stock. Interestingly, the second-largest shareholder, Guangping Li is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Hubei Chaozhuo Aviation Technology

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.

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.

Our most recent data indicates that insiders own the majority of Hubei Chaozhuo Aviation Technology Co., Ltd.. This means they can collectively make decisions for the company. So they have a CN¥1.8b stake in this CN¥3.5b 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-- including retail investors -- own 23% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hubei Chaozhuo Aviation Technology better, we need to consider many other factors. Be aware that Hubei Chaozhuo Aviation Technology is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

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.