Key Insights

• Shenzhen Infinova's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 3 investors have a majority stake in the company with 59% ownership
• Insiders own 33% of Shenzhen Infinova

To get a sense of who is truly in control of Shenzhen Infinova Limited (SZSE:002528), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 42% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While private companies were the group that reaped the most benefits after last week's 4.7% price gain, insiders also received a 33% cut.

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

Check out our latest analysis for Shenzhen Infinova

What Does The Lack Of Institutional Ownership Tell Us About Shenzhen Infinova?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Shenzhen Infinova, for yourself, below.

Hedge funds don't have many shares in Shenzhen Infinova. Shenzhen Investment Holdings Co., Ltd is currently the company's largest shareholder with 26% of shares outstanding. The second and third largest shareholders are Zhaohuai Liu and Jeffrey Zhaohuailiu, with an equal amount of shares to their name at 16%. Zhaohuai Liu, who is the second-largest shareholder, also happens to hold the title of Co-Chief Executive Officer.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 59% stake.

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 Shenzhen Infinova

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 Shenzhen Infinova Limited. It has a market capitalization of just CN¥10b, and insiders have CN¥3.5b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shenzhen Infinova. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 42%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Shenzhen Infinova better, we need to consider many other factors. Be aware that Shenzhen Infinova is showing 2 warning signs in our investment analysis , and 1 of those is concerning...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.