Recent 12% pullback would hurt Yeal Electric Co., Ltd. (SZSE:300923) insiders

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

A look at the shareholders of Yeal Electric Co., Ltd. (SZSE:300923) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 54% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 12% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Yeal Electric.

View our latest analysis for Yeal Electric

What Does The Institutional Ownership Tell Us About Yeal Electric?

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.

Institutions have a very small stake in Yeal Electric. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Yeal Electric is not owned by hedge funds. The company's largest shareholder is Biao Li, with ownership of 46%. For context, the second largest shareholder holds about 7.0% of the shares outstanding, followed by an ownership of 2.7% by the third-largest shareholder. Furthermore, CEO Zhaojin Yan is the owner of 1.2% of the company's shares.

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.

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

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 information suggests that insiders own more than half of Yeal Electric Co., Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥1.2b, that means they have CN¥639m worth of shares. 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 35% stake in Yeal Electric. 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.

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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 3 warning signs for Yeal Electric (1 is potentially serious) that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.