Individual investors invested in AVIC Heavy Machinery Co., Ltd. (SHSE:600765) copped the brunt of last week's CN¥1.2b market cap decline

Key Insights

• The considerable ownership by individual investors in AVIC Heavy Machinery indicates that they collectively have a greater say in management and business strategy
• A total of 15 investors have a majority stake in the company with 50% ownership
• 19% of AVIC Heavy Machinery is held by Institutions

A look at the shareholders of AVIC Heavy Machinery Co., Ltd. (SHSE:600765) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 44% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥29b last week, individual investors would have faced the highest losses than any other shareholder groups of the company.

Let's take a closer look to see what the different types of shareholders can tell us about AVIC Heavy Machinery.

See our latest analysis for AVIC Heavy Machinery

What Does The Institutional Ownership Tell Us About AVIC Heavy Machinery?

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.

We can see that AVIC Heavy Machinery does have institutional investors; and they hold a good portion of the company's stock. 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 AVIC Heavy Machinery's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in AVIC Heavy Machinery. Looking at our data, we can see that the largest shareholder is Aviation Industry Corporation of China,Ltd. with 29% of shares outstanding. With 5.1% and 1.9% of the shares outstanding respectively, AVIC Industry-Finance Holdings Co., Ltd. and SDIC Unity Capital Co., Ltd. are the second and third largest shareholders.

A closer look at our ownership figures suggests that the top 15 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of AVIC Heavy Machinery

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.

Our most recent data indicates that insiders own less than 1% of AVIC Heavy Machinery Co., Ltd.. However, it's possible that insiders might have an indirect interest through a more complex structure. Keep in mind that it's a big company, and the insiders own CN¥47m worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 44% stake in AVIC Heavy Machinery. 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

Our data indicates that Private Companies hold 32%, 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.

Public Company Ownership

Public companies currently own 5.1% of AVIC Heavy Machinery stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand AVIC Heavy Machinery better, we need to consider many other factors. For instance, we've identified 1 warning sign for AVIC Heavy Machinery that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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