Retail investors in NanJing AoLian AE&EA Co.,Ltd (SZSE:300585) are its biggest bettors, and their bets paid off as stock gained 16% last week

Key Insights

• The considerable ownership by retail investors in NanJing AoLian AE&EALtd indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 17 shareholders
• Insider ownership in NanJing AoLian AE&EALtd is 12%

Every investor in NanJing AoLian AE&EA Co.,Ltd (SZSE:300585) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 50% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, retail investors benefitted the most after the company's market cap rose by CN¥275m last week.

Let's take a closer look to see what the different types of shareholders can tell us about NanJing AoLian AE&EALtd.

View our latest analysis for NanJing AoLian AE&EALtd

What Does The Institutional Ownership Tell Us About NanJing AoLian AE&EALtd?

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.

NanJing AoLian AE&EALtd 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. 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 NanJing AoLian AE&EALtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in NanJing AoLian AE&EALtd. The company's largest shareholder is Guangxi Ruiying Asset Management Co., Ltd., with ownership of 30%. With 11% and 1.3% of the shares outstanding respectively, Jun Sheng Liu and Keli Motor Group Co., Ltd. are the second and third largest shareholders.

After doing some more digging, we found that the top 17 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over 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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of NanJing AoLian AE&EALtd

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.

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 a reasonable proportion of NanJing AoLian AE&EA Co.,Ltd. It has a market capitalization of just CN¥2.0b, and insiders have CN¥234m worth of shares in their own names. 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-- including retail investors -- own 50% 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

It seems that Private Companies own 30%, of the NanJing AoLian AE&EALtd stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the 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. For instance, we've identified 4 warning signs for NanJing AoLian AE&EALtd (2 can't be ignored) that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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