Ningbo Gaofa Automotive Control System Co., Ltd.'s (SHSE:603788) biggest owners are retail investors who got richer after stock soared 11% last week

Key Insights

• Ningbo Gaofa Automotive Control System's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 52% of the business is held by the top 4 shareholders
• 14% of Ningbo Gaofa Automotive Control System is held by insiders

A look at the shareholders of Ningbo Gaofa Automotive Control System Co., Ltd. (SHSE:603788) can tell us which group is most powerful. With 40% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, retail investors benefitted the most after the company's market cap rose by CN¥277m last week.

Let's delve deeper into each type of owner of Ningbo Gaofa Automotive Control System, beginning with the chart below.

View our latest analysis for Ningbo Gaofa Automotive Control System

What Does The Institutional Ownership Tell Us About Ningbo Gaofa Automotive Control System?

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 Ningbo Gaofa Automotive Control System does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Ningbo Gaofa Automotive Control System's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Ningbo Gaofa Automotive Control System. Ningbo Gaofa Holding Co., Ltd. is currently the largest shareholder, with 38% of shares outstanding. Great Wall Guorong Investment Management Co., Ltd is the second largest shareholder owning 5.2% of common stock, and Gaofa Qian holds about 4.9% of the company stock. Gaofa Qian, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. Furthermore, CEO Guonian Qian is the owner of 4.4% of the company's shares.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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 Ningbo Gaofa Automotive Control System

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Ningbo Gaofa Automotive Control System Co., Ltd.. Insiders have a CN¥387m stake in this CN¥2.8b 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, who are usually individual investors, hold a 40% stake in Ningbo Gaofa Automotive Control System. 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

We can see that Private Companies own 38%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Ningbo Gaofa Automotive Control System has 2 warning signs (and 1 which shouldn't be ignored) we think 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.