Individual investors invested in Shanghai Huace Navigation Technology Ltd (SZSE:300627) copped the brunt of last week's CN¥769m market cap decline

Key Insights

• Shanghai Huace Navigation Technology's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 9 investors have a majority stake in the company with 50% ownership
• 25% of Shanghai Huace Navigation Technology is held by insiders

To get a sense of who is truly in control of Shanghai Huace Navigation Technology Ltd (SZSE:300627), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 37% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 3.3% decrease in the stock price last week, individual investors suffered the most losses, but insiders who own 25% stock also took a hit.

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

See our latest analysis for Shanghai Huace Navigation Technology

What Does The Institutional Ownership Tell Us About Shanghai Huace Navigation Technology?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Shanghai Huace Navigation Technology does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Shanghai Huace Navigation Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Shanghai Huace Navigation Technology. The company's largest shareholder is Yan Ping Zhao, with ownership of 20%. Meanwhile, the second and third largest shareholders, hold 12% and 5.3%, of the shares outstanding, respectively. Additionally, the company's CEO Dong Guo Piao directly holds 1.8% of the total shares outstanding.

We did some more digging and found that 9 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Shanghai Huace Navigation Technology

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.

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 information suggests that insiders maintain a significant holding in Shanghai Huace Navigation Technology Ltd. It has a market capitalization of just CN¥22b, and insiders have CN¥5.6b 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

With a 37% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shanghai Huace Navigation Technology. 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 22%, 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 Shanghai Huace Navigation Technology better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

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.