Private equity firms among FAWER Automotive Parts Limited Company's (SZSE:000030) largest shareholders, saw gain in holdings value after stock jumped 4.6% last week

Key Insights

• Significant control over FAWER Automotive Parts Limited by private equity firms implies that the general public has more power to influence management and governance-related decisions
• 60% of the business is held by the top 3 shareholders
• 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 FAWER Automotive Parts Limited Company (SZSE:000030), then you'll have to look at the makeup of its share registry. We can see that private equity firms own the lion's share in the company with 56% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private equity firms collectively scored the highest last week as the company hit CN¥9.2b market cap following a 4.6% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about FAWER Automotive Parts Limited.

View our latest analysis for FAWER Automotive Parts Limited

What Does The Institutional Ownership Tell Us About FAWER Automotive Parts Limited?

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.

FAWER Automotive Parts Limited already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 FAWER Automotive Parts Limited'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 FAWER Automotive Parts Limited. Faw Equity Investment (Tianjin) Co., Ltd. is currently the company's largest shareholder with 26% of shares outstanding. For context, the second largest shareholder holds about 19% of the shares outstanding, followed by an ownership of 15% by the third-largest shareholder.

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

Insider Ownership Of FAWER Automotive Parts Limited

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.

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 most recent data indicates that insiders own less than 1% of FAWER Automotive Parts Limited Company. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around CN¥52m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over FAWER Automotive Parts Limited. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 56% stake in FAWER Automotive Parts Limited. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Public Company Ownership

Public companies currently own 15% of FAWER Automotive Parts Limited stock. 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 FAWER Automotive Parts Limited better, we need to consider many other factors. For example, we've discovered 3 warning signs for FAWER Automotive Parts Limited (1 doesn't sit too well with us!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.