Feilong Auto Components Co., Ltd.'s (SZSE:002536) stock price dropped 7.2% last week; individual investors would not be happy

Key Insights

• Feilong Auto Components' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 9 investors have a majority stake in the company with 51% ownership
• 15% of Feilong Auto Components is held by Institutions

To get a sense of who is truly in control of Feilong Auto Components Co., Ltd. (SZSE:002536), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 44% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥5.5b last week, individual investors would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Feilong Auto Components, beginning with the chart below.

View our latest analysis for Feilong Auto Components

What Does The Institutional Ownership Tell Us About Feilong Auto Components?

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.

As you can see, institutional investors have a fair amount of stake in Feilong Auto Components. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Feilong Auto Components' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Feilong Auto Components. The company's largest shareholder is Henan Wanxi Holding Co., Ltd., with ownership of 34%. With 5.1% and 2.9% of the shares outstanding respectively, Yaozhong Sun and Invesco Great Wall Fund Management Co. Ltd are the second and third largest shareholders. Yaozhong Sun, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

We also observed that the top 9 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Feilong Auto Components

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

We can see that insiders own shares in Feilong Auto Components Co., Ltd.. As individuals, the insiders collectively own CN¥403m worth of the CN¥5.5b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 44% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 34%, 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:

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. Case in point: We've spotted 2 warning signs for Feilong Auto Components you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com