Key Insights

• Significant insider control over Bafang Electric (Suzhou)Ltd implies vested interests in company growth
• 57% of the business is held by the top 2 shareholders
• Institutional ownership in Bafang Electric (Suzhou)Ltd is 13%

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.

As market cap fell to CN¥9.1b 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 Bafang Electric (Suzhou)Ltd.

View our latest analysis for Bafang Electric (Suzhou)Ltd

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

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.

As you can see, institutional investors have a fair amount of stake in Bafang Electric (Suzhou)Ltd. 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 Bafang Electric (Suzhou)Ltd, (below). Of course, keep in mind that there are other factors to consider, too.

Bafang Electric (Suzhou)Ltd is not owned by hedge funds. The company's CEO Qinghua Wang is the largest shareholder with 40% of shares outstanding. With 16% and 8.6% of the shares outstanding respectively, Xianbing He and Zhenhua Yu are the second and third largest shareholders. Note that two of the top three shareholders are also Senior Key Executive and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Bafang Electric (Suzhou)Ltd

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.

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.

Our information suggests that insiders own more than half of Bafang Electric (Suzhou) Co.,Ltd.. This gives them effective control of the company. That means insiders have a very meaningful CN¥5.9b stake in this CN¥9.1b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public-- including retail investors -- own 14% stake in the company, and hence can't easily be ignored. 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

Our data indicates that Private Companies hold 7.5%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Bafang Electric (Suzhou)Ltd better, we need to consider many other factors. Be aware that Bafang Electric (Suzhou)Ltd is showing 2 warning signs in our investment analysis , you should know about...

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.