Retail investors among Zotye Automobile Co., Ltd's (SZSE:000980) largest shareholders, saw gain in holdings value after stock jumped 28% last week

Key Insights

• Zotye Automobile's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 47% of the business is held by the top 18 shareholders
• Institutions own 14% of Zotye Automobile

A look at the shareholders of Zotye Automobile Co., Ltd (SZSE:000980) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 53% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, retail investors collectively scored the highest last week as the company hit CN¥12b market cap following a 28% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Zotye Automobile.

View our latest analysis for Zotye Automobile

What Does The Institutional Ownership Tell Us About Zotye Automobile?

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 Zotye Automobile 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. 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 Zotye Automobile's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Zotye Automobile. The company's largest shareholder is Shenzhen Shengshang Holdings Group Co., Ltd., with ownership of 15%. Meanwhile, the second and third largest shareholders, hold 9.3% and 7.6%, of the shares outstanding, respectively.

On studying our ownership data, we found that 18 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. 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 Zotye Automobile

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. 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.

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.

Our most recent data indicates that insiders own less than 1% of Zotye Automobile Co., Ltd. However, it's possible that insiders might have an indirect interest through a more complex structure. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own CN¥452k worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 53% of Zotye Automobile shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

Our data indicates that Private Companies hold 33%, of the company's shares. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Zotye Automobile you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.