Ecovacs Robotics Co., Ltd.'s (SHSE:603486) market cap up CN¥1.4b last week, benefiting both private companies who own 43% as well as insiders

Key Insights

• The considerable ownership by private companies in Ecovacs Robotics indicates that they collectively have a greater say in management and business strategy
• 56% of the business is held by the top 2 shareholders
• Insiders own 27% of Ecovacs Robotics

If you want to know who really controls Ecovacs Robotics Co., Ltd. (SHSE:603486), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 43% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 5.3% increase in the stock price last week, private companies profited the most, but insiders who own 27% stock also stood to gain from the increase.

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

See our latest analysis for Ecovacs Robotics

What Does The Institutional Ownership Tell Us About Ecovacs Robotics?

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.

We can see that Ecovacs Robotics does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Ecovacs Robotics' historic earnings and revenue below, but keep in mind there's always more to the story.

Ecovacs Robotics is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Suzhou Chuangling Zhihui Investment Management Co., Ltd. with 42% of shares outstanding. Cheng Qian is the second largest shareholder owning 14% of common stock, and Dongqi Qian holds about 10% of the company stock. Dongqi Qian, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. In addition, we found that Jianhua Zhuang, the CEO has 1.9% of the shares allocated to their name.

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 studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Ecovacs Robotics

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.

It seems insiders own a significant proportion of Ecovacs Robotics Co., Ltd.. It has a market capitalization of just CN¥27b, and insiders have CN¥7.4b worth of shares in their own names. That's quite significant. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 21% stake in Ecovacs Robotics. 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

Our data indicates that Private Companies hold 43%, of the company's shares. 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 Ecovacs Robotics better, we need to consider many other factors. For instance, we've identified 2 warning signs for Ecovacs Robotics that you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.