Key Insights

• Leader Harmonious Drive Systems' significant insider ownership suggests inherent interests in company's expansion
• The top 5 shareholders own 51% of the company
• Institutions own 24% of Leader Harmonious Drive Systems

To get a sense of who is truly in control of Leader Harmonious Drive Systems Co., Ltd. (SHSE:688017), 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 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week's 6.1% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Leader Harmonious Drive Systems.

What Does The Institutional Ownership Tell Us About Leader Harmonious Drive Systems?

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.

Leader Harmonious Drive Systems 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. 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 Leader Harmonious Drive Systems' earnings history below. Of course, the future is what really matters.

Leader Harmonious Drive Systems is not owned by hedge funds. Jing Zuo is currently the company's largest shareholder with 20% of shares outstanding. With 20% and 4.8% of the shares outstanding respectively, Yuyu Zuo and SDIC Innovation Investment Management Co., Ltd. are the second and third largest shareholders.

On looking further, we found that 51% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Leader Harmonious Drive Systems

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. 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 Leader Harmonious Drive Systems Co., Ltd.. It has a market capitalization of just CN¥15b, and insiders have CN¥6.9b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 30% stake in Leader Harmonious Drive Systems. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Leader Harmonious Drive Systems better, we need to consider many other factors. For example, we've discovered 2 warning signs for Leader Harmonious Drive Systems (1 is a bit concerning!) that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.