Key Insights

• Kunshan Huguang Auto HarnessLtd's significant insider ownership suggests inherent interests in company's expansion
• The largest shareholder of the company is Sanrong Cheng with a 60% stake
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Kunshan Huguang Auto Harness Co.,Ltd. (SHSE:605333), 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 76% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by CN¥511m last week.

Let's delve deeper into each type of owner of Kunshan Huguang Auto HarnessLtd, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Kunshan Huguang Auto HarnessLtd?

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 Kunshan Huguang Auto HarnessLtd. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Kunshan Huguang Auto HarnessLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Kunshan Huguang Auto HarnessLtd. The company's largest shareholder is Sanrong Cheng, with ownership of 60%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Sung Sung Kim is the second largest shareholder owning 15% of common stock, and E Fund Management Co., Ltd. holds about 2.8% of the company stock. Sung Sung Kim, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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 Kunshan Huguang Auto HarnessLtd

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.

Our information suggests that insiders own more than half of Kunshan Huguang Auto Harness Co.,Ltd.. This gives them effective control of the company. Insiders own CN¥8.1b worth of shares in the CN¥11b company. That's extraordinary! 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

The general public-- including retail investors -- own 14% stake in the company, and hence can't easily be ignored. 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:

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 2 warning signs for Kunshan Huguang Auto HarnessLtd you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

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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.