Key Insights

• The considerable ownership by retail investors in Guangdong Highsun GroupLtd indicates that they collectively have a greater say in management and business strategy
• A total of 15 investors have a majority stake in the company with 42% ownership
• Institutional ownership in Guangdong Highsun GroupLtd is 16%

A look at the shareholders of Guangdong Highsun Group Co.,Ltd. (SZSE:000861) can tell us which group is most powerful. With 58% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, retail investors were the biggest beneficiaries of last week's 12% gain.

In the chart below, we zoom in on the different ownership groups of Guangdong Highsun GroupLtd.

What Does The Institutional Ownership Tell Us About Guangdong Highsun GroupLtd?

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.

Guangdong Highsun GroupLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Guangdong Highsun GroupLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Guangdong Highsun GroupLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Guangzhou Highsun Enterprises Group Corp. with 24% of shares outstanding. With 5.0% and 2.3% of the shares outstanding respectively, Shanghai Silver Leaf Investment Co., Ltd. and Jianming Shao are the second and third largest shareholders. Jianming Shao, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

On studying our ownership data, we found that 15 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 Guangdong Highsun GroupLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Shareholders would probably be interested to learn that insiders own shares in Guangdong Highsun Group Co.,Ltd.. As individuals, the insiders collectively own CN¥92m worth of the CN¥4.0b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 58% stake in Guangdong Highsun GroupLtd, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

We can see that Private Companies own 24%, 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 Guangdong Highsun GroupLtd better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Guangdong Highsun GroupLtd .

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.