Key Insights

• The considerable ownership by individual investors in Guizhou Aviation Technical Development indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 17 shareholders
• Institutional ownership in Guizhou Aviation Technical Development is 33%

Every investor in Guizhou Aviation Technical Development Co., Ltd (SHSE:688239) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 36% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of individual investors took a hit after last week's 9.3% price drop, institutions with their 33% holdings also suffered.

Let's delve deeper into each type of owner of Guizhou Aviation Technical Development, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Guizhou Aviation Technical Development?

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.

As you can see, institutional investors have a fair amount of stake in Guizhou Aviation Technical Development. 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. 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 Guizhou Aviation Technical Development, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Guizhou Aviation Technical Development. Shandong Huaigu Enterprise Management Co., Ltd. is currently the largest shareholder, with 22% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.3% and 3.3%, of the shares outstanding, respectively. Hua Zhang, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. Additionally, the company's CEO Manyu Lu directly holds 1.8% of the total shares outstanding.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 17 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Guizhou Aviation Technical Development

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Shareholders would probably be interested to learn that insiders own shares in Guizhou Aviation Technical Development Co., Ltd. As individuals, the insiders collectively own CN¥363m worth of the CN¥4.0b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Guizhou Aviation Technical Development. 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 Company Ownership

We can see that Private Companies own 22%, 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. To that end, you should be aware of the 1 warning sign we've spotted with Guizhou Aviation Technical Development .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.