Key Insights

• Significant insider control over Nanjing Develop Advanced Manufacturing implies vested interests in company growth
• A total of 8 investors have a majority stake in the company with 51% ownership
• 18% of Nanjing Develop Advanced Manufacturing is held by Institutions

A look at the shareholders of Nanjing Develop Advanced Manufacturing Co., Ltd. (SHSE:688377) can tell us which group is most powerful. The group holding the most number of shares in the company, around 43% 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.

And last week, insiders endured the biggest losses as the stock fell by 13%.

Let's delve deeper into each type of owner of Nanjing Develop Advanced Manufacturing, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Nanjing Develop Advanced Manufacturing?

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.

We can see that Nanjing Develop Advanced Manufacturing does have institutional investors; and they hold a good portion of the company's 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Nanjing Develop Advanced Manufacturing, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Nanjing Develop Advanced Manufacturing. Looking at our data, we can see that the largest shareholder is the CEO Li Zhang with 26% of shares outstanding. For context, the second largest shareholder holds about 7.5% of the shares outstanding, followed by an ownership of 3.6% by the third-largest shareholder. Interestingly, the second-largest shareholder, Yue Ling Li is also Chief Financial Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Nanjing Develop Advanced Manufacturing

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Nanjing Develop Advanced Manufacturing Co., Ltd.. Insiders own CN¥1.3b worth of shares in the CN¥3.2b 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

The general public, who are usually individual investors, hold a 36% stake in Nanjing Develop Advanced Manufacturing. 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 3.1%, 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Nanjing Develop Advanced Manufacturing that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.