Key Insights

• Significant control over Shenzhen Gongjin Electronics by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 19 investors have a majority stake in the company with 50% ownership
• 42% of Shenzhen Gongjin Electronics is held by insiders

If you want to know who really controls Shenzhen Gongjin Electronics Co., Ltd. (SHSE:603118), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual investors with 48% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While individual investors were the group that benefitted the most from last week's CN¥374m market cap gain, insiders too had a 42% share in those profits.

In the chart below, we zoom in on the different ownership groups of Shenzhen Gongjin Electronics.

What Does The Institutional Ownership Tell Us About Shenzhen Gongjin Electronics?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Shenzhen Gongjin Electronics already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Shenzhen Gongjin Electronics' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Shenzhen Gongjin Electronics. The company's largest shareholder is Fo Nan Tang, with ownership of 21%. Meanwhile, the second and third largest shareholders, hold 20% and 1.3%, of the shares outstanding, respectively.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 19 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Shenzhen Gongjin Electronics

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of Shenzhen Gongjin Electronics Co., Ltd.. Insiders own CN¥2.6b worth of shares in the CN¥6.3b company. We 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-- including retail investors -- own 48% stake in the company, and hence can't easily be ignored. 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:

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. For instance, we've identified 1 warning sign for Shenzhen Gongjin Electronics that you should be aware of.

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.