Guangdong Lyric Robot Automation Co., Ltd.'s (SHSE:688499) Stock Price Dropped 12% Last Week; Private Companies Would Not Be Happy

Simply Wall St ·  Mar 16, 2023 21:00

Key Insights

  • The considerable ownership by private companies in Guangdong Lyric Robot Automation indicates that they collectively have a greater say in management and business strategy
  • A total of 3 investors have a majority stake in the company with 51% ownership
  • 17% of Guangdong Lyric Robot Automation is held by Institutions

To get a sense of who is truly in control of Guangdong Lyric Robot Automation Co., Ltd. (SHSE:688499), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 50% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 12% decline in share price, private companies suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Guangdong Lyric Robot Automation.

Check out our latest analysis for Guangdong Lyric Robot Automation

SHSE:688499 Ownership Breakdown March 17th 2023

What Does The Institutional Ownership Tell Us About Guangdong Lyric Robot Automation?

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.

We can see that Guangdong Lyric Robot Automation does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Guangdong Lyric Robot Automation, (below). Of course, keep in mind that there are other factors to consider, too.

SHSE:688499 Earnings and Revenue Growth March 17th 2023

Hedge funds don't have many shares in Guangdong Lyric Robot Automation. Looking at our data, we can see that the largest shareholder is Huizhou Lyric Robot Investment Co., Ltd. with 45% of shares outstanding. With 3.2% and 2.7% of the shares outstanding respectively, Ningbo Meishan Bonded Port Area Hongbang Investment Management Partnership Enterprise (LP) and Jiahong Lu are the second and third largest shareholders. Jiahong Lu, who is the third-largest shareholder, also happens to hold the title of Vice Chairman.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Guangdong Lyric Robot Automation

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can see that insiders own shares in Guangdong Lyric Robot Automation Co., Ltd.. The insiders have a meaningful stake worth CN¥647m. Most would see this as a real positive. Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 24% stake in Guangdong Lyric Robot Automation. 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.

Private Company Ownership

It seems that Private Companies own 50%, of the Guangdong Lyric Robot Automation 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.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

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.

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