Key Insights

• Guangzhou Sanfu New Materials TechnologyLtd's significant insider ownership suggests inherent interests in company's expansion
• 52% of the business is held by the top 4 shareholders
• Institutional ownership in Guangzhou Sanfu New Materials TechnologyLtd is 13%

If you want to know who really controls Guangzhou Sanfu New Materials Technology Co.,Ltd (SHSE:688359), then you'll have to look at the makeup of its share registry. With 51% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week's 17% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Guangzhou Sanfu New Materials TechnologyLtd.

What Does The Institutional Ownership Tell Us About Guangzhou Sanfu New Materials TechnologyLtd?

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 Guangzhou Sanfu New Materials TechnologyLtd 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 Guangzhou Sanfu New Materials TechnologyLtd, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Guangzhou Sanfu New Materials TechnologyLtd. Looking at our data, we can see that the largest shareholder is Wenlong Shangguan with 30% of shares outstanding. With 16% and 3.5% of the shares outstanding respectively, Chenghong Qu and Sigma Investment Consulting Co., Ltd. are the second and third largest shareholders. Chenghong Qu, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive.

On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Guangzhou Sanfu New Materials TechnologyLtd

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 information suggests that insiders own more than half of Guangzhou Sanfu New Materials Technology Co.,Ltd. This gives them effective control of the company. Given it has a market cap of CN¥4.6b, that means they have CN¥2.4b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 34% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Guangzhou Sanfu New Materials TechnologyLtd. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Guangzhou Sanfu New Materials TechnologyLtd better, we need to consider many other factors. For example, we've discovered 2 warning signs for Guangzhou Sanfu New Materials TechnologyLtd (1 is concerning!) that you should be aware of before investing here.

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.