Changzhou Xingyu Automotive Lighting Systems Co.,Ltd. (SHSE:601799) insiders have significant skin in the game with 48% ownership

Key Insights

• Changzhou Xingyu Automotive Lighting SystemsLtd's significant insider ownership suggests inherent interests in company's expansion
• The top 3 shareholders own 54% of the company
• Institutional ownership in Changzhou Xingyu Automotive Lighting SystemsLtd is 19%

Every investor in Changzhou Xingyu Automotive Lighting Systems Co.,Ltd. (SHSE:601799) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 48% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.

In the chart below, we zoom in on the different ownership groups of Changzhou Xingyu Automotive Lighting SystemsLtd.

See our latest analysis for Changzhou Xingyu Automotive Lighting SystemsLtd

What Does The Institutional Ownership Tell Us About Changzhou Xingyu Automotive Lighting SystemsLtd?

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 Changzhou Xingyu Automotive Lighting SystemsLtd does have institutional investors; and they hold a good portion of the company's stock. 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 Changzhou Xingyu Automotive Lighting SystemsLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Changzhou Xingyu Automotive Lighting SystemsLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Xiaoping Zhou with 36% of shares outstanding. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 6.2% by the third-largest shareholder.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 54% stake.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Changzhou Xingyu Automotive Lighting SystemsLtd

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 information suggests that insiders maintain a significant holding in Changzhou Xingyu Automotive Lighting Systems Co.,Ltd.. It has a market capitalization of just CN¥33b, and insiders have CN¥16b 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 27% stake in Changzhou Xingyu Automotive Lighting SystemsLtd. 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 Company Ownership

We can see that Private Companies own 6.2%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Changzhou Xingyu Automotive Lighting SystemsLtd better, we need to consider many other factors. Take risks for example - Changzhou Xingyu Automotive Lighting SystemsLtd has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

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