Key Insights

• Significant control over Hefei Jianghang Aircraft EquipmentLtd by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 55% of the company
• Institutions own 16% of Hefei Jianghang Aircraft EquipmentLtd

Every investor in Hefei Jianghang Aircraft Equipment Co.,Ltd. (SHSE:688586) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 48% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, private companies endured the biggest losses as the stock fell by 4.7%.

In the chart below, we zoom in on the different ownership groups of Hefei Jianghang Aircraft EquipmentLtd.

What Does The Institutional Ownership Tell Us About Hefei Jianghang Aircraft EquipmentLtd?

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.

Hefei Jianghang Aircraft EquipmentLtd 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. 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 Hefei Jianghang Aircraft EquipmentLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Hefei Jianghang Aircraft EquipmentLtd is not owned by hedge funds. Our data shows that Aviation Industry Corporation of China,Ltd. is the largest shareholder with 41% of shares outstanding. With 14% and 6.2% of the shares outstanding respectively, AVIC Aviation Industry Investment Co., Ltd. and China Reform Capital Co., Ltd. are the second and third largest shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Hefei Jianghang Aircraft EquipmentLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own less than 1% of Hefei Jianghang Aircraft Equipment Co.,Ltd.. But they may have an indirect interest through a corporate structure that we haven't picked up on. Keep in mind that it's a big company, and the insiders own CN¥44m worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hefei Jianghang Aircraft EquipmentLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 14%, private equity firms could influence the Hefei Jianghang Aircraft EquipmentLtd board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

It seems that Private Companies own 48%, of the Hefei Jianghang Aircraft EquipmentLtd 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:

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. For example, we've discovered 2 warning signs for Hefei Jianghang Aircraft EquipmentLtd that you should be aware of before investing here.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.