Jiangxi Hongdu Aviation Industry Co., Ltd.'s (SHSE:600316) market cap dropped CN¥373m last week; Private companies bore the brunt

Key Insights

• The considerable ownership by private companies in Jiangxi Hongdu Aviation Industry indicates that they collectively have a greater say in management and business strategy
• A total of 4 investors have a majority stake in the company with 51% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

If you want to know who really controls Jiangxi Hongdu Aviation Industry Co., Ltd. (SHSE:600316), then you'll have to look at the makeup of its share registry. With 48% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, private companies endured the biggest losses as the stock fell by 3.2%.

Let's take a closer look to see what the different types of shareholders can tell us about Jiangxi Hongdu Aviation Industry.

View our latest analysis for Jiangxi Hongdu Aviation Industry

What Does The Institutional Ownership Tell Us About Jiangxi Hongdu Aviation Industry?

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.

We can see that Jiangxi Hongdu Aviation Industry does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Jiangxi Hongdu Aviation Industry, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Jiangxi Hongdu Aviation Industry. The company's largest shareholder is China Aerospace Science and Industry Corporation Limited, with ownership of 44%. With 4.4% and 1.2% of the shares outstanding respectively, Aviation Industry Corporation of China,Ltd. and UBS SDIC Fund Management Co., Ltd. are the second and third largest shareholders.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Jiangxi Hongdu Aviation Industry

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.

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 data cannot confirm that board members are holding shares personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

The general public-- including retail investors -- own 43% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

It seems that Private Companies own 48%, of the Jiangxi Hongdu Aviation Industry 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Jiangxi Hongdu Aviation Industry better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Jiangxi Hongdu Aviation Industry you should be aware of, and 1 of them shouldn't be ignored.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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