Zhejiang Songyuan Automotive Safety Systems Co.,Ltd.'s (SZSE:300893) top holders are insiders and they are likely disappointed by the recent 7.6% drop

Key Insights

• Insiders appear to have a vested interest in Zhejiang Songyuan Automotive Safety SystemsLtd's growth, as seen by their sizeable ownership
• 67% of the company is held by a single shareholder (Chanming Hu)
• Institutions own 11% of Zhejiang Songyuan Automotive Safety SystemsLtd

If you want to know who really controls Zhejiang Songyuan Automotive Safety Systems Co.,Ltd. (SZSE:300893), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 67% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders as a group endured the highest losses after market cap fell by CN¥493m.

In the chart below, we zoom in on the different ownership groups of Zhejiang Songyuan Automotive Safety SystemsLtd.

See our latest analysis for Zhejiang Songyuan Automotive Safety SystemsLtd

What Does The Institutional Ownership Tell Us About Zhejiang Songyuan Automotive Safety SystemsLtd?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Zhejiang Songyuan Automotive Safety SystemsLtd. 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. 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 Zhejiang Songyuan Automotive Safety SystemsLtd's earnings history below. Of course, the future is what really matters.

Zhejiang Songyuan Automotive Safety SystemsLtd is not owned by hedge funds. The company's largest shareholder is Chanming Hu, with ownership of 67%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. For context, the second largest shareholder holds about 8.0% of the shares outstanding, followed by an ownership of 2.0% by the third-largest shareholder.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Zhejiang Songyuan Automotive Safety SystemsLtd

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

It seems that insiders own more than half the Zhejiang Songyuan Automotive Safety Systems Co.,Ltd. stock. This gives them a lot of power. That means they own CN¥4.0b worth of shares in the CN¥6.0b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 13% stake in Zhejiang Songyuan Automotive Safety SystemsLtd. 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 Equity Ownership

With an ownership of 8.0%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

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 for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Zhejiang Songyuan Automotive Safety SystemsLtd (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

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

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