AECC Aviation Power Co.,Ltd's (SHSE:600893) stock price dropped 4.3% last week; private companies would not be happy

Key Insights

• AECC Aviation PowerLtd's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 3 investors have a majority stake in the company with 51% ownership
• 20% of AECC Aviation PowerLtd is held by Institutions

To get a sense of who is truly in control of AECC Aviation Power Co.,Ltd (SHSE:600893), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 49% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, private companies endured the biggest losses as the stock fell by 4.3%.

In the chart below, we zoom in on the different ownership groups of AECC Aviation PowerLtd.

See our latest analysis for AECC Aviation PowerLtd

What Does The Institutional Ownership Tell Us About AECC Aviation PowerLtd?

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 AECC Aviation PowerLtd. 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 AECC Aviation PowerLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in AECC Aviation PowerLtd. Aero Engine Corporation of China is currently the largest shareholder, with 46% of shares outstanding. Aero Engine Fund Management Co., Ltd. is the second largest shareholder owning 3.7% of common stock, and AVIC Guizhou Liyang Aero-Engine (Group) Co., Ltd. holds about 1.5% of the company stock.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. 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 AECC Aviation PowerLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 data suggests that insiders own under 1% of AECC Aviation Power Co.,Ltd in their own names. However, it's possible that insiders might have an indirect interest through a more complex structure. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own CN¥217k of stock. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over AECC Aviation PowerLtd. 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

We can see that Private Companies own 49%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand AECC Aviation PowerLtd better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for AECC Aviation PowerLtd you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.