To get a sense of who is truly in control of Contemporary Amperex Technology Co., Limited (SZSE:300750), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 32% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
As a result, private companies were the biggest beneficiaries of last week's 5.5% gain.
In the chart below, we zoom in on the different ownership groups of Contemporary Amperex Technology.
See our latest analysis for Contemporary Amperex Technology
What Does The Institutional Ownership Tell Us About Contemporary Amperex 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.
Contemporary Amperex Technology 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. 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 Contemporary Amperex Technology, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in Contemporary Amperex Technology. Ningbo Meishan Bonded Port Area Ruiting Investment Co., Ltd. is currently the company's largest shareholder with 23% of shares outstanding. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 6.5% by the third-largest shareholder. Huang Shilin, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive.
To make our study more interesting, we found that the top 5 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Contemporary Amperex 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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 information suggests that insiders maintain a significant holding in Contemporary Amperex Technology Co., Limited. Insiders own CN¥163b worth of shares in the CN¥1.1t company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 25% stake in Contemporary Amperex Technology. 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 Equity Ownership
Private equity firms hold a 6.5% stake in Contemporary Amperex Technology. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
Private Company Ownership
We can see that Private Companies own 32%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
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 for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Contemporary Amperex Technology (at least 1 which makes us a bit uncomfortable) , and understanding them should be part of your investment process.
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.