WeRide Inc.'s (NASDAQ:WRD) market cap rose US$568m last week; retail investors who hold 52% profited and so did insiders

Key Insights

• The considerable ownership by retail investors in WeRide indicates that they collectively have a greater say in management and business strategy
• 48% of the business is held by the top 7 shareholders
• Insider ownership in WeRide is 16%

Every investor in WeRide Inc. (NASDAQ:WRD) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 16% increase in the stock price last week, retail investors profited the most, but insiders who own 16% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of WeRide.

Check out our latest analysis for WeRide

What Does The Lack Of Institutional Ownership Tell Us About WeRide?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of WeRide, for yourself, below.

We note that hedge funds don't have a meaningful investment in WeRide. Zhengzhou Yutong Group Co.,Ltd is currently the largest shareholder, with 16% of shares outstanding. With 7.7% and 7.6% of the shares outstanding respectively, Alliance Ventures and Qiming Weichuang Venture Capital Management (Shanghai) Company Limited are the second and third largest shareholders. Additionally, the company's CEO Xu Han directly holds 5.0% of the total shares outstanding.

A deeper look at our ownership data shows that the top 7 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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

Insider Ownership Of WeRide

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Our information suggests that insiders maintain a significant holding in WeRide Inc.. It has a market capitalization of just US$4.2b, and insiders have US$690m worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 52% of WeRide shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Equity Ownership

With an ownership of 15%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

It seems that Private Companies own 16%, of the WeRide stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 3 warning signs for WeRide (1 is potentially serious!) that you should be aware of before investing here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.