Stock Analysis

Zhongshan Broad-Ocean Motor Co., Ltd.'s (SZSE:002249) market cap dropped CN¥408m last week; Retail investors bore the brunt

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SZSE:002249

Key Insights

  • Significant control over Zhongshan Broad-Ocean Motor by retail investors implies that the general public has more power to influence management and governance-related decisions
  • A total of 25 investors have a majority stake in the company with 45% ownership
  • Insider ownership in Zhongshan Broad-Ocean Motor is 38%

To get a sense of who is truly in control of Zhongshan Broad-Ocean Motor Co., Ltd. (SZSE:002249), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 54% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of retail investors took a hit after last week’s 3.2% price drop, insiders with their 38% also suffered.

Let's take a closer look to see what the different types of shareholders can tell us about Zhongshan Broad-Ocean Motor.

See our latest analysis for Zhongshan Broad-Ocean Motor

SZSE:002249 Ownership Breakdown May 25th 2024

What Does The Institutional Ownership Tell Us About Zhongshan Broad-Ocean Motor?

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.

Less than 5% of Zhongshan Broad-Ocean Motor is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

SZSE:002249 Earnings and Revenue Growth May 25th 2024

Hedge funds don't have many shares in Zhongshan Broad-Ocean Motor. Our data shows that Chuping Lu is the largest shareholder with 26% of shares outstanding. With 5.8% and 2.5% of the shares outstanding respectively, Hai Ming Xu and Jun Gong are the second and third largest shareholders. Hai Ming Xu, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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

Insider Ownership Of Zhongshan Broad-Ocean Motor

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.

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 information suggests that insiders maintain a significant holding in Zhongshan Broad-Ocean Motor Co., Ltd.. Insiders own CN¥4.7b worth of shares in the CN¥12b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 54% of Zhongshan Broad-Ocean Motor. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

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. Be aware that Zhongshan Broad-Ocean Motor is showing 1 warning sign in our investment analysis , you should know about...

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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 Zhongshan Broad-Ocean Motor 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.