Key Insights

• Insiders appear to have a vested interest in Xiamen East Asia Machinery Industrial's growth, as seen by their sizeable ownership
• The top 2 shareholders own 71% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Xiamen East Asia Machinery Industrial Co., Ltd. (SZSE:301028), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 48% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥3.1b 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 Xiamen East Asia Machinery Industrial.

View our latest analysis for Xiamen East Asia Machinery Industrial

What Does The Institutional Ownership Tell Us About Xiamen East Asia Machinery Industrial?

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.

Less than 5% of Xiamen East Asia Machinery Industrial is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Xiamen East Asia Machinery Industrial is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Yinghuan Han with 48% of shares outstanding. For context, the second largest shareholder holds about 24% of the shares outstanding, followed by an ownership of 1.1% by the third-largest shareholder.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Xiamen East Asia Machinery Industrial

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 Xiamen East Asia Machinery Industrial Co., Ltd.. It has a market capitalization of just CN¥3.1b, and insiders have CN¥1.5b worth of shares in their own names. 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 24% stake in Xiamen East Asia Machinery Industrial. 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

It seems that Private Companies own 26%, of the Xiamen East Asia Machinery Industrial stock. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Xiamen East Asia Machinery Industrial you should know about.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.