share_log

The Recent CN¥469m Market Cap Decrease Is Likely to Have Disappointed Insiders Invested in Chuzhou Duoli Automotive Technology Co., Ltd. (SZSE:001311)

Simply Wall St ·  Jan 4 20:35

Key Insights

  • Insiders appear to have a vested interest in Chuzhou Duoli Automotive Technology's growth, as seen by their sizeable ownership
  • A total of 2 investors have a majority stake in the company with 71% ownership
  • Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Chuzhou Duoli Automotive Technology Co., Ltd. (SZSE:001311), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 75% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, insiders endured the biggest losses as the stock fell by 5.2%.

Let's take a closer look to see what the different types of shareholders can tell us about Chuzhou Duoli Automotive Technology.

View our latest analysis for Chuzhou Duoli Automotive Technology

ownership-breakdown
SZSE:001311 Ownership Breakdown January 5th 2024

What Does The Institutional Ownership Tell Us About Chuzhou Duoli Automotive 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.

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

earnings-and-revenue-growth
SZSE:001311 Earnings and Revenue Growth January 5th 2024

Chuzhou Duoli Automotive Technology is not owned by hedge funds. The company's largest shareholder is Dalong Cao, with ownership of 47%. With 24% and 1.3% of the shares outstanding respectively, Liqin Deng and China Asset Management Co. Ltd. are the second and third largest shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Chuzhou Duoli Automotive Technology

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems that insiders own more than half the Chuzhou Duoli Automotive Technology Co., Ltd. stock. This gives them a lot of power. Given it has a market cap of CN¥8.6b, that means insiders have a whopping CN¥6.4b worth of shares in their own names. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

With a 18% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Chuzhou Duoli Automotive Technology. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Chuzhou Duoli Automotive Technology (of which 1 shouldn't be ignored!) you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

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.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
    Write a comment