Chongqing Wangbian Electric (Group) Corp., Ltd. (SHSE:603191) CEO Zemin Yang's holdings dropped 7.7% in value as a result of the recent pullback

Key Insights

• Chongqing Wangbian Electric (Group)'s significant insider ownership suggests inherent interests in company's expansion
• The top 7 shareholders own 51% of the company
• Institutional ownership in Chongqing Wangbian Electric (Group) is 13%

Every investor in Chongqing Wangbian Electric (Group) Corp., Ltd. (SHSE:603191) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 44% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders as a group endured the highest losses after market cap fell by CN¥409m.

In the chart below, we zoom in on the different ownership groups of Chongqing Wangbian Electric (Group).

See our latest analysis for Chongqing Wangbian Electric (Group)

What Does The Institutional Ownership Tell Us About Chongqing Wangbian Electric (Group)?

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 Chongqing Wangbian Electric (Group) 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Chongqing Wangbian Electric (Group)'s historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Chongqing Wangbian Electric (Group). Looking at our data, we can see that the largest shareholder is the CEO Zemin Yang with 39% of shares outstanding. With 3.2% and 2.3% of the shares outstanding respectively, Bank of Communications Schroder Fund Management Co., Ltd. and Houqun Yang are the second and third largest shareholders. Interestingly, the third-largest shareholder, Houqun Yang is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

We did some more digging and found that 7 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. 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 Chongqing Wangbian Electric (Group)

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 Chongqing Wangbian Electric (Group) Corp., Ltd.. Insiders have a CN¥2.1b stake in this CN¥4.9b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 40% stake in Chongqing Wangbian Electric (Group). 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

Our data indicates that Private Companies hold 4.0%, of the company's shares. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Chongqing Wangbian Electric (Group) (of which 1 is a bit unpleasant!) you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

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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.