Key Insights

• Significant control over Hangzhou Advance Gearbox Group by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 50% of the company
• 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 Hangzhou Advance Gearbox Group Co., Ltd. (SHSE:601177), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 46% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies as a group endured the highest losses last week after market cap fell by CN¥428m.

In the chart below, we zoom in on the different ownership groups of Hangzhou Advance Gearbox Group.

What Does The Institutional Ownership Tell Us About Hangzhou Advance Gearbox 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 Hangzhou Advance Gearbox Group 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. 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 Hangzhou Advance Gearbox Group's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Hangzhou Advance Gearbox Group. Hangzhou Xiaoshan State Owned Assets Management Group Co.,Ltd. is currently the largest shareholder, with 45% of shares outstanding. China Orient Asset Management Corporation, Asset Management Arm is the second largest shareholder owning 5.0% of common stock, and Hangzhou Guangfa Technology Co.,Ltd. holds about 1.0% 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.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Hangzhou Advance Gearbox Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 information suggests that Hangzhou Advance Gearbox Group Co., Ltd. insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It seems the board members have no more than CN¥11m worth of shares in the CN¥3.1b company. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 46% 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 46%, 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 Hangzhou Advance Gearbox Group better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Hangzhou Advance Gearbox Group you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.