Ningbo Fangzheng Automobile Mould Co.,Ltd. (SZSE:300998) surges 11%; retail investors who own 33% shares profited along with insiders

Key Insights

• Ningbo Fangzheng Automobile MouldLtd's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 53% of the business is held by the top 4 shareholders
• 29% of Ningbo Fangzheng Automobile MouldLtd is held by insiders

To get a sense of who is truly in control of Ningbo Fangzheng Automobile Mould Co.,Ltd. (SZSE:300998), it is important to understand the ownership structure of the business. With 33% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Retail investors gained the most after market cap touched CN¥1.9b last week, while insiders who own 29% also benefitted.

Let's take a closer look to see what the different types of shareholders can tell us about Ningbo Fangzheng Automobile MouldLtd.

See our latest analysis for Ningbo Fangzheng Automobile MouldLtd

What Does The Institutional Ownership Tell Us About Ningbo Fangzheng Automobile MouldLtd?

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 Ningbo Fangzheng Automobile MouldLtd. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Ningbo Fangzheng Automobile MouldLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Ningbo Fangzheng Automobile MouldLtd. Our data shows that Ningbo Xinggong Fangzheng Holdings Co., Ltd. is the largest shareholder with 18% of shares outstanding. In comparison, the second and third largest shareholders hold about 16% and 13% of the stock. Two of the top three shareholders happen to be Chief Executive Officer and Member of the Board of Directors, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.

On looking further, we found that 53% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. 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 Ningbo Fangzheng Automobile MouldLtd

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. 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.

Our most recent data indicates that insiders own a reasonable proportion of Ningbo Fangzheng Automobile Mould Co.,Ltd.. Insiders own CN¥543m worth of shares in the CN¥1.9b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 33% stake in Ningbo Fangzheng Automobile MouldLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 25%, of the Ningbo Fangzheng Automobile MouldLtd stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Ningbo Fangzheng Automobile MouldLtd (1 doesn't sit too well with us!) that you should be aware of before investing here.

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.