What Type Of Shareholder Owns China Harmony New Energy Auto Holding Limited's (HKG:3836)?

Simply Wall St

Sat, Jul 27, 2019, 7:48 PM

A look at the shareholders of China Harmony New Energy Auto Holding Limited (HKG:3836) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Warren Buffett said that he likes 'a business with enduring competitive advantages that is run by able and owner-oriented people'. So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

China Harmony New Energy Auto Holding is a smaller company with a market capitalization of HK$4.0b, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about 3836.

View our latest analysis for China Harmony New Energy Auto Holding

SEHK:3836 Ownership Summary, July 28th 2019

What Does The Institutional Ownership Tell Us About China Harmony New Energy Auto Holding?

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 China Harmony New Energy Auto Holding does have institutional investors; and they hold 9.5% of the stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 China Harmony New Energy Auto Holding's earnings history, below. Of course, the future is what really matters.

SEHK:3836 Income Statement, July 28th 2019

We note that hedge funds don't have a meaningful investment in China Harmony New Energy Auto Holding. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of China Harmony New Energy Auto Holding

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.

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 most recent data indicates that insiders own a reasonable proportion of China Harmony New Energy Auto Holding Limited. Insiders own HK$1.8b worth of shares in the HK$4.0b company. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public holds a 37% stake in 3836. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 8.5%, of the 3836 shares on issue. It's hard to say for sure, but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

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