Retail investors invested in AAC Technologies Holdings Inc. (HKG:2018) copped the brunt of last week's HK$1.6b market cap decline

Key Insights

• The considerable ownership by retail investors in AAC Technologies Holdings indicates that they collectively have a greater say in management and business strategy
• A total of 6 investors have a majority stake in the company with 51% ownership
• 37% of AAC Technologies Holdings is held by insiders

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If you want to know who really controls AAC Technologies Holdings Inc. (HKG:2018), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 38% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 3.4% decrease in the stock price last week, retail investors suffered the most losses, but insiders who own 37% stock also took a hit.

Let's take a closer look to see what the different types of shareholders can tell us about AAC Technologies Holdings.

Check out our latest analysis for AAC Technologies Holdings

What Does The Institutional Ownership Tell Us About AAC Technologies Holdings?

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.

As you can see, institutional investors have a fair amount of stake in AAC Technologies Holdings. 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. 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 AAC Technologies Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in AAC Technologies Holdings. The company's largest shareholder is Chun Yuan Wu, with ownership of 22%. For context, the second largest shareholder holds about 15% of the shares outstanding, followed by an ownership of 4.8% by the third-largest shareholder. Zhengmin Pan, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

On further inspection, we found that more than half the company's shares are owned by the top 6 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of AAC Technologies Holdings

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 AAC Technologies Holdings Inc.. It has a market capitalization of just HK$46b, and insiders have HK$17b 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

The general public, who are usually individual investors, hold a 38% stake in AAC Technologies Holdings. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand AAC Technologies Holdings better, we need to consider many other factors.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.