Key Insights

• Significant insider control over Yinchuan Weili Transmission Technology implies vested interests in company growth
• The top 2 shareholders own 70% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Yinchuan Weili Transmission Technology Co., Ltd. (SZSE:300904) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 70% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 11% gain.

Let's delve deeper into each type of owner of Yinchuan Weili Transmission Technology, beginning with the chart below.

Check out our latest analysis for Yinchuan Weili Transmission Technology

What Does The Institutional Ownership Tell Us About Yinchuan Weili Transmission 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.

As you can see, institutional investors have a fair amount of stake in Yinchuan Weili Transmission Technology. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Yinchuan Weili Transmission Technology's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Yinchuan Weili Transmission Technology. Our data shows that Abo Li is the largest shareholder with 49% of shares outstanding. For context, the second largest shareholder holds about 21% of the shares outstanding, followed by an ownership of 3.0% by the third-largest shareholder. Xiang Li, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Yinchuan Weili Transmission Technology

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.

It seems that insiders own more than half the Yinchuan Weili Transmission Technology Co., Ltd. stock. This gives them a lot of power. Given it has a market cap of CN¥4.1b, that means they have CN¥2.8b worth of shares. 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-- including retail investors -- own 23% stake in the company, and hence can't easily be ignored. 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 Yinchuan Weili Transmission Technology better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Yinchuan Weili Transmission Technology you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.