Following recent decline, Changzhou Xingyu Automotive Lighting Systems Co.,Ltd.'s (SHSE:601799) top shareholder CEO Xiaoping Zhou sees holdings value drop by 8.8%

Key Insights

• Significant insider control over Changzhou Xingyu Automotive Lighting SystemsLtd implies vested interests in company growth
• A total of 3 investors have a majority stake in the company with 54% ownership
• 19% of Changzhou Xingyu Automotive Lighting SystemsLtd is held by Institutions

To get a sense of who is truly in control of Changzhou Xingyu Automotive Lighting Systems Co.,Ltd. (SHSE:601799), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 48% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, insiders endured the biggest losses as the stock fell by 8.8%.

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

View 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.

As you can see, institutional investors have a fair amount of stake in Changzhou Xingyu Automotive Lighting SystemsLtd. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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.

We note that hedge funds don't have a meaningful investment in Changzhou Xingyu Automotive Lighting SystemsLtd. Looking at our data, we can see that the largest shareholder is the CEO Xiaoping Zhou with 36% of shares outstanding. With 12% and 6.2% of the shares outstanding respectively, Bajin Zhou and Changzhou Xingyu Investment Management Co., Ltd. are the second and third largest shareholders.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 Changzhou Xingyu Automotive Lighting SystemsLtd

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

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¥40b, and insiders have CN¥19b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 27% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 6.2%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private 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.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.