Insiders were the key beneficiaries as Yeal Electric Co., Ltd.'s (SZSE:300923) market cap rises to CN¥1.8b

Key Insights

• Insiders appear to have a vested interest in Yeal Electric's growth, as seen by their sizeable ownership
• The top 2 shareholders own 53% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Yeal Electric Co., Ltd. (SZSE:300923) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 54% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit CN¥1.8b market cap following a 28% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Yeal Electric.

See our latest analysis for Yeal Electric

What Does The Institutional Ownership Tell Us About Yeal Electric?

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.

Less than 5% of Yeal Electric 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 business gets stronger from here, we could see a situation where more institutions are keen to buy. 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.

Yeal Electric is not owned by hedge funds. The company's largest shareholder is Biao Li, with ownership of 46%. In comparison, the second and third largest shareholders hold about 7.0% and 2.7% of the stock. Additionally, the company's CEO Zhaojin Yan directly holds 1.2% of the total shares outstanding.

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

Insider Ownership Of Yeal Electric

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.

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.

It seems that insiders own more than half the Yeal Electric Co., Ltd. stock. This gives them a lot of power. So they have a CN¥960m stake in this CN¥1.8b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 36% stake in Yeal Electric. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 7.0%, of the Yeal Electric stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Yeal Electric better, we need to consider many other factors. Be aware that Yeal Electric is showing 3 warning signs in our investment analysis , and 2 of those are a bit concerning...

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.

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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.