Yarward Electronics (Shandong) Co., Ltd.'s (SZSE:301337) market cap dropped CN¥552m last week; Private companies bore the brunt

Key Insights

• Yarward Electronics (Shandong)'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 55% ownership
• 18% of Yarward Electronics (Shandong) is held by insiders

To get a sense of who is truly in control of Yarward Electronics (Shandong) Co., Ltd. (SZSE:301337), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 47% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private companies as a group endured the highest losses last week after market cap fell by CN¥552m.

Let's delve deeper into each type of owner of Yarward Electronics (Shandong), beginning with the chart below.

View our latest analysis for Yarward Electronics (Shandong)

What Does The Institutional Ownership Tell Us About Yarward Electronics (Shandong)?

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.

Since institutions own only a small portion of Yarward Electronics (Shandong), many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Yarward Electronics (Shandong) is not owned by hedge funds. Shenzhen Zhongya Huaxin Technology Co.,Ltd. is currently the company's largest shareholder with 46% of shares outstanding. Yuquan Geng is the second largest shareholder owning 8.3% of common stock, and Chengli Sun holds about 5.2% of the company stock. Chengli Sun, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Furthermore, CEO Hui Xiang is the owner of 0.6% 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 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Yarward Electronics (Shandong)

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems insiders own a significant proportion of Yarward Electronics (Shandong) Co., Ltd.. Insiders have a CN¥588m stake in this CN¥3.2b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in Yarward Electronics (Shandong). 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 47%, of the Yarward Electronics (Shandong) 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Yarward Electronics (Shandong) better, we need to consider many other factors. Take risks for example - Yarward Electronics (Shandong) has 3 warning signs (and 1 which can't be ignored) we think you should know about.

Of course this may not be the best stock to buy. So take a peek at this free 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.