Every investor in Zhejiang Leapmotor Technology Co., Ltd. (HKG:9863) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 53% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While the holdings of individual investors took a hit after last week's 3.3% price drop, insiders with their 16% also suffered.
Let's take a closer look to see what the different types of shareholders can tell us about Zhejiang Leapmotor Technology.
See our latest analysis for Zhejiang Leapmotor Technology
What Does The Institutional Ownership Tell Us About Zhejiang Leapmotor Technology?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
As you can see, institutional investors have a fair amount of stake in Zhejiang Leapmotor Technology. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Zhejiang Leapmotor Technology's historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Zhejiang Leapmotor Technology. With a 8.5% stake, CEO Jiangming Zhu is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 8.0% and 7.9%, of the shares outstanding, respectively.
On studying our ownership data, we found that 14 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Zhejiang Leapmotor Technology
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.
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 Zhejiang Leapmotor Technology Co., Ltd.. It has a market capitalization of just HK$31b, and insiders have HK$5.2b 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, who are usually individual investors, hold a substantial 53% stake in Zhejiang Leapmotor Technology, suggesting it is a fairly popular stock. 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 a stake of 5.3%, private equity firms could influence the Zhejiang Leapmotor Technology board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
Private Company Ownership
We can see that Private Companies own 3.0%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Public Company Ownership
We can see that public companies hold 7.9% of the Zhejiang Leapmotor Technology shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Zhejiang Leapmotor Technology is showing 3 warning signs in our investment analysis , and 1 of those is concerning...
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.