CEO Quan Nie, Shenzhen Liande Automation Equipment co.,ltd.'s (SZSE:300545) largest shareholder sees value of holdings go down 6.8% after recent drop

Key Insights

• Significant insider control over Shenzhen Liande Automation Equipmentltd implies vested interests in company growth
• A total of 2 investors have a majority stake in the company with 52% ownership
• 10% of Shenzhen Liande Automation Equipmentltd is held by Institutions

If you want to know who really controls Shenzhen Liande Automation Equipment co.,ltd. (SZSE:300545), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 50% ownership. 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¥389m.

In the chart below, we zoom in on the different ownership groups of Shenzhen Liande Automation Equipmentltd.

View our latest analysis for Shenzhen Liande Automation Equipmentltd

What Does The Institutional Ownership Tell Us About Shenzhen Liande Automation Equipmentltd?

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.

Shenzhen Liande Automation Equipmentltd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Shenzhen Liande Automation Equipmentltd, (below). Of course, keep in mind that there are other factors to consider, too.

Shenzhen Liande Automation Equipmentltd is not owned by hedge funds. With a 49% stake, CEO Quan Nie is the largest shareholder. Shenzhen CMAF Management Co., Ltd. is the second largest shareholder owning 2.9% of common stock, and Guangdong Hengkuo Investment Management Co., Ltd. holds about 2.3% of the company stock.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Shenzhen Liande Automation Equipmentltd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 Shenzhen Liande Automation Equipment co.,ltd.. Insiders have a CN¥2.7b stake in this CN¥5.3b 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 Shenzhen Liande Automation Equipmentltd. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

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.

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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.