Dongguan Yiheda Automation Co., Ltd (SZSE:301029) CEO Liguo Jin's holdings dropped 7.6% in value as a result of the recent pullback

Key Insights

• Dongguan Yiheda Automation's significant insider ownership suggests inherent interests in company's expansion
• A total of 6 investors have a majority stake in the company with 51% ownership
• Institutions own 11% of Dongguan Yiheda Automation

Every investor in Dongguan Yiheda Automation Co., Ltd (SZSE:301029) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 38% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 7.6% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of Dongguan Yiheda Automation, beginning with the chart below.

View our latest analysis for Dongguan Yiheda Automation

What Does The Institutional Ownership Tell Us About Dongguan Yiheda Automation?

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.

As you can see, institutional investors have a fair amount of stake in Dongguan Yiheda Automation. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Dongguan Yiheda Automation's historic earnings and revenue below, but keep in mind there's always more to the story.

Dongguan Yiheda Automation is not owned by hedge funds. With a 20% stake, CEO Liguo Jin is the largest shareholder. With 15% and 6.3% of the shares outstanding respectively, Hong Zhang and Shenzhen Capital Group Co., Ltd. are the second and third largest shareholders. Interestingly, the second-largest shareholder, Hong Zhang is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Dongguan Yiheda Automation

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 maintain a significant holding in Dongguan Yiheda Automation Co., Ltd. It is very interesting to see that insiders have a meaningful CN¥6.3b stake in this CN¥17b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 23% stake in Dongguan Yiheda Automation. 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.

Private Equity Ownership

With a stake of 6.3%, private equity firms could influence the Dongguan Yiheda Automation board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

It seems that Private Companies own 21%, of the Dongguan Yiheda Automation stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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 instance, we've identified 3 warning signs for Dongguan Yiheda Automation (1 is significant) that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.