Shanghai Automobile Air-Conditioner Accessories Co., Ltd.'s (SHSE:603107) last week's 8.8% decline must have disappointed public companies who have a significant stake

Key Insights

• Significant control over Shanghai Automobile Air-Conditioner Accessories by public companies implies that the general public has more power to influence management and governance-related decisions
• The top 3 shareholders own 56% of the company
• Insider ownership in Shanghai Automobile Air-Conditioner Accessories is 18%

To get a sense of who is truly in control of Shanghai Automobile Air-Conditioner Accessories Co., Ltd. (SHSE:603107), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 33% to be precise, is public companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to CN¥5.6b last week, public companies would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Shanghai Automobile Air-Conditioner Accessories.

Check out our latest analysis for Shanghai Automobile Air-Conditioner Accessories

What Does The Institutional Ownership Tell Us About Shanghai Automobile Air-Conditioner Accessories?

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.

Less than 5% of Shanghai Automobile Air-Conditioner Accessories is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Hedge funds don't have many shares in Shanghai Automobile Air-Conditioner Accessories. Shanghai Aerospace Automobile Electromechanical Co., Ltd. is currently the company's largest shareholder with 33% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 15% and 8.1%, of the shares outstanding, respectively. In addition, we found that Youzhao Wang, the CEO has 1.1% of the shares allocated to their name.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence 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. 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 Shanghai Automobile Air-Conditioner Accessories

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 Shanghai Automobile Air-Conditioner Accessories Co., Ltd.. Insiders have a CN¥1.0b stake in this CN¥5.6b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 22% stake in the company, and hence can't easily be ignored. 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

Our data indicates that Private Companies hold 22%, of the company's shares. 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.

Public Company Ownership

It appears to us that public companies own 33% of Shanghai Automobile Air-Conditioner Accessories. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shanghai Automobile Air-Conditioner Accessories better, we need to consider many other factors. For instance, we've identified 1 warning sign for Shanghai Automobile Air-Conditioner Accessories that you should be aware of.

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.

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

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.