Insiders were the biggest winners as Wuxi Zhenhua Auto Parts Co.,Ltd.'s (SHSE:605319) market cap grew by CN¥408m last week

Key Insights

• Insiders appear to have a vested interest in Wuxi Zhenhua Auto PartsLtd's growth, as seen by their sizeable ownership
• The top 2 shareholders own 51% of the company
• 12% of Wuxi Zhenhua Auto PartsLtd is held by Institutions

If you want to know who really controls Wuxi Zhenhua Auto Parts Co.,Ltd. (SHSE:605319), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 35% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit CN¥6.4b market cap following a 6.8% gain in the stock.

Let's delve deeper into each type of owner of Wuxi Zhenhua Auto PartsLtd, beginning with the chart below.

See our latest analysis for Wuxi Zhenhua Auto PartsLtd

What Does The Institutional Ownership Tell Us About Wuxi Zhenhua Auto PartsLtd?

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.

Wuxi Zhenhua Auto PartsLtd 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. 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 Wuxi Zhenhua Auto PartsLtd, (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 Wuxi Zhenhua Auto PartsLtd. Wuxi Junrun Investment Partnership Enterprise (L.P.) is currently the largest shareholder, with 28% of shares outstanding. For context, the second largest shareholder holds about 23% of the shares outstanding, followed by an ownership of 12% by the third-largest shareholder. Note that the second and third-largest shareholders are also Chief Executive Officer and Chairman of the Board, respectively, meaning that the company's top shareholders are insiders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Wuxi Zhenhua Auto PartsLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in Wuxi Zhenhua Auto Parts Co.,Ltd.. Insiders own CN¥2.2b worth of shares in the CN¥6.4b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Wuxi Zhenhua Auto PartsLtd. 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

It seems that Private Companies own 32%, of the Wuxi Zhenhua Auto PartsLtd stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Wuxi Zhenhua Auto PartsLtd better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Wuxi Zhenhua Auto PartsLtd .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.