Key Insights

• Chongqing Changan Automobile's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 16 investors have a majority stake in the company with 50% ownership
• 20% of Chongqing Changan Automobile is held by Institutions

A look at the shareholders of Chongqing Changan Automobile Company Limited (SZSE:000625) can tell us which group is most powerful. The group holding the most number of shares in the company, around 45% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, retail investors benefitted the most after the company's market cap rose by CN¥3.5b last week.

Let's take a closer look to see what the different types of shareholders can tell us about Chongqing Changan Automobile.

What Does The Institutional Ownership Tell Us About Chongqing Changan Automobile?

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.

Chongqing Changan Automobile already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Chongqing Changan Automobile's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Chongqing Changan Automobile. The company's largest shareholder is China South Industries Group Co.,Ltd., with ownership of 35%. For context, the second largest shareholder holds about 4.6% of the shares outstanding, followed by an ownership of 4.3% by the third-largest shareholder.

After doing some more digging, we found that the top 16 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Chongqing Changan Automobile

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our data suggests that insiders own under 1% of Chongqing Changan Automobile Company Limited in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own CN¥63m of stock. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 45% stake in Chongqing Changan Automobile. 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

It seems that Private Companies own 35%, of the Chongqing Changan Automobile 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Chongqing Changan Automobile better, we need to consider many other factors. For example, we've discovered 3 warning signs for Chongqing Changan Automobile that you should be aware of before investing here.

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.

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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.