Aier Eye Hospital Group Co., Ltd.'s (SZSE:300015) stock price dropped 8.5% last week; private companies would not be happy

Key Insights

• Significant control over Aier Eye Hospital Group by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 3 shareholders own 53% of the company
• Insider ownership in Aier Eye Hospital Group is 20%

To get a sense of who is truly in control of Aier Eye Hospital Group Co., Ltd. (SZSE:300015), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 34% 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 8.5% decline in share price, private companies suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Aier Eye Hospital Group.

Check out our latest analysis for Aier Eye Hospital Group

What Does The Institutional Ownership Tell Us About Aier Eye Hospital Group?

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.

Aier Eye Hospital Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Aier Eye Hospital Group's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Aier Eye Hospital Group. Looking at our data, we can see that the largest shareholder is Aier Medical Investment Group Co., Ltd. with 34% of shares outstanding. Bang Chen is the second largest shareholder owning 16% of common stock, and Li Li holds about 3.5% of the company stock. Note that the second and third-largest shareholders are also Top Key Executive and Vice Chairman, respectively, meaning that the company's top shareholders are insiders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. 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 Aier Eye Hospital Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own a reasonable proportion of Aier Eye Hospital Group Co., Ltd.. It has a market capitalization of just CN¥100b, and insiders have CN¥20b 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 26% stake in Aier Eye Hospital Group. 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

Our data indicates that Private Companies hold 34%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Aier Eye Hospital Group better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Aier Eye Hospital Group , and understanding them should be part of your investment process.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com