Key Insights

• The considerable ownership by private companies in Fsilon Furnishing and Construction Materials indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Fsilon Investment Holding Co., Ltd. with a 58% stake
• 14% of Fsilon Furnishing and Construction Materials is held by insiders

To get a sense of who is truly in control of Fsilon Furnishing and Construction Materials Corporation (SHSE:605318), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 58% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies were the biggest beneficiaries of last week's 20% gain.

In the chart below, we zoom in on the different ownership groups of Fsilon Furnishing and Construction Materials.

Check out our latest analysis for Fsilon Furnishing and Construction Materials

What Does The Institutional Ownership Tell Us About Fsilon Furnishing and Construction Materials?

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 Fsilon Furnishing and Construction Materials. 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. 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 Fsilon Furnishing and Construction Materials' 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 Fsilon Furnishing and Construction Materials. The company's largest shareholder is Fsilon Investment Holding Co., Ltd., with ownership of 58%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 10% and 4.4% of the shares outstanding respectively, Zhenghua Shen and Xuejuan Wang are the second and third largest shareholders. Note that the second and third-largest shareholders are also Top Key Executive and Member of the Board of Directors, respectively, meaning that the company's top shareholders are insiders.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Fsilon Furnishing and Construction Materials

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 most recent data indicates that insiders own a reasonable proportion of Fsilon Furnishing and Construction Materials Corporation. Insiders own CN¥324m worth of shares in the CN¥2.3b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Fsilon Furnishing and Construction Materials. 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 58%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 4 warning signs we've spotted with Fsilon Furnishing and Construction Materials (including 1 which is concerning) .

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.