Changqing Machinery Company Limited's (SHSE:603768) most bullish insider is CEO Yinghong Wu, and their holdings value went up by 12% last week

Key Insights

• Changqing Machinery's significant insider ownership suggests inherent interests in company's expansion
• A total of 3 investors have a majority stake in the company with 55% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Changqing Machinery Company Limited (SHSE:603768), then you'll have to look at the makeup of its share registry. With 61% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit CN¥3.3b market cap following a 12% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Changqing Machinery.

Check out our latest analysis for Changqing Machinery

What Does The Institutional Ownership Tell Us About Changqing Machinery?

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.

We can see that Changqing Machinery does have institutional investors; and they hold a good portion of the company's stock. 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 Changqing Machinery'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 Changqing Machinery. With a 29% stake, CEO Yinghong Wu is the largest shareholder. With 16% and 10.0% of the shares outstanding respectively, Yingju Wu and Huijuan Zhu are the second and third largest shareholders. Interestingly, the third-largest shareholder, Huijuan Zhu is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

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 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 Changqing Machinery

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.

It seems that insiders own more than half the Changqing Machinery Company Limited stock. This gives them a lot of power. So they have a CN¥2.0b stake in this CN¥3.3b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 33% stake in Changqing Machinery. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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 4 warning signs for Changqing Machinery (1 is significant!) that you should be aware of before investing here.

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.