Key Insights

• The considerable ownership by retail investors in EHang Holdings indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 20 shareholders
• Insider ownership in EHang Holdings is 33%

To get a sense of who is truly in control of EHang Holdings Limited (NASDAQ:EH), it is important to understand the ownership structure of the business. With 48% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders, who own 33% shares weren't spared from last week's US$59m market cap drop, retail investors as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of EHang Holdings.

What Does The Institutional Ownership Tell Us About EHang Holdings?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that EHang Holdings does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see EHang Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in EHang Holdings. Looking at our data, we can see that the largest shareholder is the CEO Huazhi Hu with 31% of shares outstanding. With 7.4% and 2.9% of the shares outstanding respectively, Axim Wealth Management LLC and Carmignac Gestion SA are the second and third largest shareholders.

After doing some more digging, we found that the top 20 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of EHang Holdings

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.

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 most recent data indicates that insiders own a reasonable proportion of EHang Holdings Limited. Insiders own US$253m worth of shares in the US$773m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 48% ownership, the general public, mostly comprising of individual investors, have some degree of sway over EHang Holdings. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand EHang Holdings better, we need to consider many other factors. Take risks for example - EHang Holdings has 1 warning sign we think you should be aware of.

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.

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