Private companies among Nexteer Automotive Group Limited's (HKG:1316) largest stockholders and were hit after last week's 19% price drop

Simply Wall St · 10/18 01:19

Key Insights

  • The considerable ownership by private companies in Nexteer Automotive Group indicates that they collectively have a greater say in management and business strategy
  • A total of 2 investors have a majority stake in the company with 65% ownership
  • Institutions own 15% of Nexteer Automotive Group

A look at the shareholders of Nexteer Automotive Group Limited (HKG:1316) can tell us which group is most powerful. With 44% stake, private companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to HK$6.8b last week, private companies would have faced the highest losses than any other shareholder groups of the company.

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

See our latest analysis for Nexteer Automotive Group

ownership-breakdown
SEHK:1316 Ownership Breakdown October 18th 2024

What Does The Institutional Ownership Tell Us About Nexteer Automotive Group?

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.

We can see that Nexteer Automotive Group 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 Nexteer Automotive Group's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
SEHK:1316 Earnings and Revenue Growth October 18th 2024

Nexteer Automotive Group is not owned by hedge funds. Aviation Industry Corporation of China,Ltd. is currently the company's largest shareholder with 44% of shares outstanding. Beijing E-Town International Investment & Development Co.,Ltd. is the second largest shareholder owning 21% of common stock, and M&G Investment Management Limited holds about 3.7% of the company stock.

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.

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

Insider Ownership Of Nexteer Automotive Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

We note our data does not show any board members holding shares, personally. We do not see this low level of ownership often, and it is possible our data is imperfect. But shareholders can click here to check if insiders have been selling stock.

General Public Ownership

The general public-- including retail investors -- own 20% 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 Equity Ownership

With a stake of 21%, private equity firms could influence the Nexteer Automotive Group board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

We can see that Private Companies own 44%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Nexteer Automotive Group better, we need to consider many other factors. For example, we've discovered 1 warning sign for Nexteer Automotive Group that you should be aware of before investing here.

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.