Hubei Chaozhuo Aviation Technology Co., Ltd.'s (SHSE:688237) largest shareholder, CEO Yihan Li sees holdings value fall by 11% following recent drop

Key Insights

• Significant insider control over Hubei Chaozhuo Aviation Technology implies vested interests in company growth
• A total of 3 investors have a majority stake in the company with 50% ownership
• Institutional ownership in Hubei Chaozhuo Aviation Technology is 24%

If you want to know who really controls Hubei Chaozhuo Aviation Technology Co., Ltd. (SHSE:688237), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to CN¥2.1b last week, insiders 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 Hubei Chaozhuo Aviation Technology.

Check out our latest analysis for Hubei Chaozhuo Aviation Technology

What Does The Institutional Ownership Tell Us About Hubei Chaozhuo Aviation Technology?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

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

Hedge funds don't have many shares in Hubei Chaozhuo Aviation Technology. With a 23% stake, CEO Yihan Li is the largest shareholder. In comparison, the second and third largest shareholders hold about 16% and 11% of the stock. Interestingly, the second-largest shareholder, Guangping Li is also Chief Financial Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

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 it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Hubei Chaozhuo Aviation Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 information suggests that insiders own more than half of Hubei Chaozhuo Aviation Technology Co., Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥2.1b, that means they have CN¥1.1b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 22% stake in Hubei Chaozhuo Aviation Technology. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hubei Chaozhuo Aviation Technology better, we need to consider many other factors. For instance, we've identified 2 warning signs for Hubei Chaozhuo Aviation Technology 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.