What You Need To Know About Grand Baoxin Auto Group Limited's (HKG:1293) Investor Composition

If you want to know who really controls Grand Baoxin Auto Group Limited (HKG:1293), then you'll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Grand Baoxin Auto Group is not a large company by global standards. It has a market capitalization of HK$2.5b, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions don't own many shares in the company. We can zoom in on the different ownership groups, to learn more about Grand Baoxin Auto Group.

See our latest analysis for Grand Baoxin Auto Group

What Does The Institutional Ownership Tell Us About Grand Baoxin Auto Group?

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.

Less than 5% of Grand Baoxin Auto Group is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. 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.

Hedge funds don't have many shares in Grand Baoxin Auto Group. The company's largest shareholder is China Grand Automotive Services Group Co., Ltd., with ownership of 68%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Aihua Yang is the second largest shareholder owning 7.7% of common stock, and The Vanguard Group, Inc. holds about 1.0% of the company stock.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Grand Baoxin Auto Group

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.

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.

I can report that insiders do own shares in Grand Baoxin Auto Group Limited. It has a market capitalization of just HK$2.5b, and insiders have HK$195m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public holds a 21% stake in Grand Baoxin Auto Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 68% of Grand Baoxin Auto Group. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Grand Baoxin Auto Group better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Grand Baoxin Auto Group you should be aware of, and 1 of them can't be ignored.

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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