Guangdong Vanward New Electric Co., Ltd.'s (SZSE:002543) last week's 6.7% decline must have disappointed private companies who have a significant stake

Key Insights

• Guangdong Vanward New Electric's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 2 investors have a majority stake in the company with 54% ownership
• Insider ownership in Guangdong Vanward New Electric is 34%

If you want to know who really controls Guangdong Vanward New Electric Co., Ltd. (SZSE:002543), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 38% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 6.7% decrease in the stock price last week, private companies suffered the most losses, but insiders who own 34% stock also took a hit.

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

Check out our latest analysis for Guangdong Vanward New Electric

What Does The Institutional Ownership Tell Us About Guangdong Vanward New 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.

Institutions have a very small stake in Guangdong Vanward New 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 company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. 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.

Guangdong Vanward New Electric is not owned by hedge funds. Our data shows that Guangdong Wanhe Group Co., Ltd. is the largest shareholder with 37% of shares outstanding. For context, the second largest shareholder holds about 17% of the shares outstanding, followed by an ownership of 9.2% by the third-largest shareholder. Chulong Lu, who is the third-largest shareholder, also happens to hold the title of Vice Chairman.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Guangdong Vanward New Electric

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.

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 maintain a significant holding in Guangdong Vanward New Electric Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥2.7b stake in this CN¥7.9b 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 Guangdong Vanward New 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 38%, of the Guangdong Vanward New Electric 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Guangdong Vanward New Electric better, we need to consider many other factors. Take risks for example - Guangdong Vanward New Electric has 1 warning sign we think 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.