CEO Qing Shi, Motorcomm Electronic Technology Co., Ltd.'s (SHSE:688515) largest shareholder sees value of holdings go down 5.7% after recent drop

Key Insights

• Significant insider control over Motorcomm Electronic Technology implies vested interests in company growth
• The top 7 shareholders own 52% of the company
• Institutions own 19% of Motorcomm Electronic Technology

If you want to know who really controls Motorcomm Electronic Technology Co., Ltd. (SHSE:688515), 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 32% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥7.1b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

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

Check out our latest analysis for Motorcomm Electronic Technology

What Does The Institutional Ownership Tell Us About Motorcomm Electronic Technology?

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.

Motorcomm Electronic Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Motorcomm Electronic Technology's earnings history below. Of course, the future is what really matters.

Motorcomm Electronic Technology is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Qing Shi with 12% of shares outstanding. In comparison, the second and third largest shareholders hold about 10% and 9.2% of the stock. Interestingly, the third-largest shareholder, Yufei Ouyang is also a Member of the Board of Directors, again, indicating 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 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 Motorcomm Electronic Technology

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Motorcomm Electronic Technology Co., Ltd.. Insiders have a CN¥2.3b stake in this CN¥7.1b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 28% stake in Motorcomm Electronic Technology. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 7.0%, private equity firms could influence the Motorcomm Electronic Technology board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

It seems that Private Companies own 13%, of the Motorcomm Electronic Technology stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for Motorcomm Electronic Technology 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.