- The considerable ownership by private companies in Guangzhou Automobile Group indicates that they collectively have a greater say in management and business strategy
- The largest shareholder of the company is Guangzhou Automobile Industry Group Co. Ltd. with a 54% stake
- Institutions own 16% of Guangzhou Automobile Group
Every investor in Guangzhou Automobile Group Co., Ltd. (HKG:2238) should be aware of the most powerful shareholder groups. With 57% stake, private companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And individual investors on the other hand have a 27% ownership in the company.
Let's take a closer look to see what the different types of shareholders can tell us about Guangzhou Automobile Group.
What Does The Institutional Ownership Tell Us About Guangzhou Automobile Group?
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.
Guangzhou Automobile 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 Guangzhou Automobile Group's earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Guangzhou Automobile Group. Looking at our data, we can see that the largest shareholder is Guangzhou Automobile Industry Group Co. Ltd. with 54% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 3.8% of the shares outstanding, followed by an ownership of 2.0% by the third-largest shareholder.
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 Guangzhou Automobile Group
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our data suggests that insiders own under 1% of Guangzhou Automobile Group Co., Ltd. in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own HK$237m of stock. Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 27% stake in Guangzhou Automobile Group. 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 57%, 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.
It's always worth thinking about the different groups who own shares in a company. But to understand Guangzhou Automobile Group better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Guangzhou Automobile Group you should know about.
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.
Guangzhou Automobile Group
Guangzhou Automobile Group Co., Ltd., together with its subsidiaries, engages in the research, development, manufacture, and sale of vehicles and motorcycles, and parts and components; and provision of commercial and financial services in Mainland China and internationally.
Reasonable growth potential and fair value.