Key Insights
- Guangzhou Automobile Group's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
- 51% of the company is held by a single shareholder (Guangzhou Automobile Industry Group Co. Ltd.)
- Institutional ownership in Guangzhou Automobile Group is 14%
A look at the shareholders of Guangzhou Automobile Group Co., Ltd. (HKG:2238) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 54% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
As a result, private companies as a group endured the highest losses last week after market cap fell by HK$1.9b.
In the chart below, we zoom in on the different ownership groups of Guangzhou Automobile Group.
Check out our latest analysis for Guangzhou Automobile Group
What Does The Institutional Ownership Tell Us About Guangzhou Automobile Group?
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 Guangzhou Automobile Group. 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 Guangzhou Automobile Group, (below). Of course, keep in mind that there are other factors to consider, too.
Guangzhou Automobile Group is not owned by hedge funds. Guangzhou Automobile Industry Group Co. Ltd. is currently the largest shareholder, with 51% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Guangzhou Huiyin Tianyue Equity Investment Fund Management Co., Ltd. is the second largest shareholder owning 3.8% of common stock, and BlackRock, Inc. holds about 1.8% of the company stock.
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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Guangzhou Automobile Group
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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
Our most recent data indicates that insiders own less than 1% of Guangzhou Automobile Group Co., Ltd.. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own HK$206m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.
General Public Ownership
The general public-- including retail investors -- own 32% 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.
Private Company Ownership
We can see that Private Companies own 54%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for Guangzhou Automobile Group you should be aware of.
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.