Key Insights

• Motorcomm Electronic Technology's significant insider ownership suggests inherent interests in company's expansion
• 50% of the business is held by the top 6 shareholders
• Institutions own 21% of Motorcomm Electronic Technology

To get a sense of who is truly in control of Motorcomm Electronic Technology Co., Ltd. (SHSE:688515), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 33% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, insiders endured the biggest losses as the stock fell by 7.3%.

Let's delve deeper into each type of owner of Motorcomm Electronic Technology, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Motorcomm Electronic Technology?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Motorcomm Electronic Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Motorcomm Electronic Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Motorcomm Electronic Technology is not owned by hedge funds. Qing Shi is currently the largest shareholder, with 12% of shares outstanding. Suzhou Ruiqitong Enterprise Management Partnership Enterprise (Limited Partnership) is the second largest shareholder owning 10% of common stock, and Yufei Ouyang holds about 9.2% of the company stock. Yufei Ouyang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Motorcomm Electronic Technology

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.

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 Motorcomm Electronic Technology Co., Ltd.. Insiders have a CN¥1.6b stake in this CN¥4.8b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. 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 24% stake in Motorcomm Electronic Technology. 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.

Private Equity Ownership

With a stake of 7.0%, private equity firms could influence the Motorcomm Electronic Technology board. 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

It seems that Private Companies own 13%, of the Motorcomm Electronic Technology stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Motorcomm Electronic Technology is showing 2 warning signs in our investment analysis , and 1 of those can't be ignored...

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.

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