Private companies invested in Shanghai Daimay Automotive Interior Co., Ltd (SHSE:603730) up 6.3% last week, insiders too were rewarded

Key Insights

• The considerable ownership by private companies in Shanghai Daimay Automotive Interior indicates that they collectively have a greater say in management and business strategy
• Zhejiang Zhoushan Daimei Investment Co., Ltd. owns 56% of the company
• Insider ownership in Shanghai Daimay Automotive Interior is 24%

Every investor in Shanghai Daimay Automotive Interior Co., Ltd (SHSE:603730) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 56% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Private companies gained the most after market cap touched CN¥17b last week, while insiders who own 24% also benefitted.

In the chart below, we zoom in on the different ownership groups of Shanghai Daimay Automotive Interior.

See our latest analysis for Shanghai Daimay Automotive Interior

What Does The Institutional Ownership Tell Us About Shanghai Daimay Automotive Interior?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Shanghai Daimay Automotive Interior does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Shanghai Daimay Automotive Interior's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Shanghai Daimay Automotive Interior. Our data shows that Zhejiang Zhoushan Daimei Investment Co., Ltd. is the largest shareholder with 56% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 15% of the shares outstanding, followed by an ownership of 9.2% by the third-largest shareholder. Ming Jiang, who is the third-largest shareholder, also happens to hold the title of Vice Chairman.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Shanghai Daimay Automotive Interior

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 insiders own a significant proportion of Shanghai Daimay Automotive Interior Co., Ltd. Insiders own CN¥4.0b worth of shares in the CN¥17b company. That's quite meaningful. 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 10% stake in Shanghai Daimay Automotive Interior. 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 56%, 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Shanghai Daimay Automotive Interior you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.