Stock Analysis

Qinchuan Machine Tool & Tool Group Share Co., Ltd.'s (SZSE:000837) largest shareholders are private companies who were rewarded as market cap surged CN¥555m last week

SZSE:000837
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Key Insights

To get a sense of who is truly in control of Qinchuan Machine Tool & Tool Group Share Co., Ltd. (SZSE:000837), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies with 46% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, private companies benefitted the most after the company's market cap rose by CN¥555m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Qinchuan Machine Tool & Tool Group Share.

Check out our latest analysis for Qinchuan Machine Tool & Tool Group Share

ownership-breakdown
SZSE:000837 Ownership Breakdown October 23rd 2024

What Does The Institutional Ownership Tell Us About Qinchuan Machine Tool & Tool Group Share?

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.

Qinchuan Machine Tool & Tool Group Share already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Qinchuan Machine Tool & Tool Group Share's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
SZSE:000837 Earnings and Revenue Growth October 23rd 2024

We note that hedge funds don't have a meaningful investment in Qinchuan Machine Tool & Tool Group Share. The company's largest shareholder is Shaanxi Fast Auto Drive Group Co., Ltd, with ownership of 35%. Shaanxi Financial Holding Group Co.,Ltd is the second largest shareholder owning 10% of common stock, and Shanghai Haitong Securities Asset Management Company Ltd. holds about 1.0% of the company stock.

We did some more digging and found that 8 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.

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

Insider Ownership Of Qinchuan Machine Tool & Tool Group Share

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 Qinchuan Machine Tool & Tool Group Share Co., Ltd. insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around CN¥226k worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 44% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Qinchuan Machine Tool & Tool Group Share. 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

Our data indicates that Private Companies hold 46%, 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Qinchuan Machine Tool & Tool Group Share is showing 2 warning signs in our investment analysis , you should know about...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.

Valuation is complex, but we're here to simplify it.

Discover if Qinchuan Machine Tool & Tool Group Share might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.

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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.