Insiders with their considerable ownership were the key benefactors as Yinchuan Weili Transmission Technology Co., Ltd. (SZSE:300904) touches CN¥3.3b market cap

Key Insights

• Yinchuan Weili Transmission Technology's significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 70% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Yinchuan Weili Transmission Technology Co., Ltd. (SZSE:300904), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 70% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit CN¥3.3b market cap following a 11% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Yinchuan Weili Transmission Technology.

Check out our latest analysis for Yinchuan Weili Transmission Technology

What Does The Institutional Ownership Tell Us About Yinchuan Weili Transmission 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.

Yinchuan Weili Transmission Technology 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. 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 Yinchuan Weili Transmission Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Yinchuan Weili Transmission Technology is not owned by hedge funds. Abo Li is currently the company's largest shareholder with 49% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 21% and 3.0%, of the shares outstanding, respectively. Xiang Li, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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 Yinchuan Weili Transmission Technology

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 own more than half of Yinchuan Weili Transmission Technology Co., Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥3.3b, that means they have CN¥2.3b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. 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 24% stake in Yinchuan Weili Transmission Technology. 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:

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. For example, we've discovered 3 warning signs for Yinchuan Weili Transmission Technology (2 shouldn't be ignored!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com