Private companies account for 45% of China Yuchai International Limited's (NYSE:CYD) ownership, while individual investors account for 20%
Key Insights
The considerable ownership by private companies in China Yuchai International indicates that they collectively have a greater say in management and business strategy
63% of the business is held by the top 2 shareholders
Using data from company's past performance alongside ownership research, one can better assess the future performance of a company
To get a sense of who is truly in control of China Yuchai International Limited (NYSE:CYD), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 45% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Meanwhile, individual investors make up 20% of the company’s shareholders.
Let's take a closer look to see what the different types of shareholders can tell us about China Yuchai International.
See our latest analysis for China Yuchai International
What Does The Institutional Ownership Tell Us About China Yuchai International?
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 China Yuchai International. 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 China Yuchai International's earnings history below. Of course, the future is what really matters.
Our data indicates that hedge funds own 10% of China Yuchai International. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Looking at our data, we can see that the largest shareholder is Hong Leong Investment Holdings Pte. Ltd. with 45% of shares outstanding. For context, the second largest shareholder holds about 18% of the shares outstanding, followed by an ownership of 10% by the third-largest shareholder.
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. There is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of China Yuchai International
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 most recent data indicates that insiders own less than 1% of China Yuchai International Limited. But they may have an indirect interest through a corporate structure that we haven't picked up on. It seems the board members have no more than US$736k worth of shares in the US$453m 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 20% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
Our data indicates that Private Companies hold 45%, of the company's shares. 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.
Public Company Ownership
It appears to us that public companies own 18% of China Yuchai International. 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:
It's always worth thinking about the different groups who own shares in a company. But to understand China Yuchai International better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with China Yuchai International .
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.
