Chengdu ALD Aviation Manufacturing Corporation (SZSE:300696) adds CN¥621m in market cap and insiders have a 49% stake in that gain

Key Insights

• Chengdu ALD Aviation Manufacturing's significant insider ownership suggests inherent interests in company's expansion
• A total of 6 investors have a majority stake in the company with 50% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Chengdu ALD Aviation Manufacturing Corporation (SZSE:300696) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 49% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 15% gain.

In the chart below, we zoom in on the different ownership groups of Chengdu ALD Aviation Manufacturing.

See our latest analysis for Chengdu ALD Aviation Manufacturing

What Does The Institutional Ownership Tell Us About Chengdu ALD Aviation Manufacturing?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Chengdu ALD Aviation Manufacturing. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Chengdu ALD Aviation Manufacturing, (below). Of course, keep in mind that there are other factors to consider, too.

Chengdu ALD Aviation Manufacturing is not owned by hedge funds. Guang Wen Ran is currently the company's largest shareholder with 12% of shares outstanding. The second and third largest shareholders are Hong Tao Ding and Peng Xie, with an equal amount of shares to their name at 12%. Peng Xie, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

We did some more digging and found that 6 of the top shareholders account for roughly 50% 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. 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 Chengdu ALD Aviation Manufacturing

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.

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 Chengdu ALD Aviation Manufacturing Corporation. It has a market capitalization of just CN¥4.8b, and insiders have CN¥2.3b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 42% stake in Chengdu ALD Aviation Manufacturing. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 3 warning signs for Chengdu ALD Aviation Manufacturing that you should be aware of before investing here.

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.

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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.