Zhejiang Dehong Automotive Electronic & Electrical Co., Ltd.'s (SHSE:603701) market cap surged CN¥601m last week, individual investors who have a lot riding on the company were rewarded

Key Insights

• Zhejiang Dehong Automotive Electronic & Electrical's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 54% of the business is held by the top 4 shareholders
• Insider ownership in Zhejiang Dehong Automotive Electronic & Electrical is 25%

Every investor in Zhejiang Dehong Automotive Electronic & Electrical Co., Ltd. (SHSE:603701) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 32% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, individual investors collectively scored the highest last week as the company hit CN¥3.4b market cap following a 21% gain in the stock.

Let's delve deeper into each type of owner of Zhejiang Dehong Automotive Electronic & Electrical, beginning with the chart below.

See our latest analysis for Zhejiang Dehong Automotive Electronic & Electrical

What Does The Institutional Ownership Tell Us About Zhejiang Dehong Automotive Electronic & Electrical?

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.

Zhejiang Dehong Automotive Electronic & Electrical already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Zhejiang Dehong Automotive Electronic & Electrical's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Zhejiang Dehong Automotive Electronic & Electrical. The company's largest shareholder is Ningbo Zhenhai Investment Co.,Ltd., with ownership of 30%. Meanwhile, the second and third largest shareholders, hold 12% and 6.3%, of the shares outstanding, respectively.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Zhejiang Dehong Automotive Electronic & Electrical

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.

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 a reasonable proportion of Zhejiang Dehong Automotive Electronic & Electrical Co., Ltd.. Insiders have a CN¥872m stake in this CN¥3.4b 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 32% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 30%, 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.

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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Zhejiang Dehong Automotive Electronic & Electrical (of which 1 makes us a bit uncomfortable!) you should know about.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.