Key Insights

• Insiders appear to have a vested interest in Shanghai Geoharbour Construction Group's growth, as seen by their sizeable ownership
• The largest shareholder of the company is Shilong Xu with a 69% stake
• 14% of Shanghai Geoharbour Construction Group is held by Institutions

To get a sense of who is truly in control of Shanghai Geoharbour Construction Group Co., Ltd. (SHSE:605598), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 71% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit CN¥7.0b market cap following a 7.3% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Shanghai Geoharbour Construction Group.

View our latest analysis for Shanghai Geoharbour Construction Group

What Does The Institutional Ownership Tell Us About Shanghai Geoharbour Construction Group?

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.

Shanghai Geoharbour Construction Group 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. 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 Shanghai Geoharbour Construction Group's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Shanghai Geoharbour Construction Group. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Shanghai Geoharbour Construction Group's case, its Secretary, Shilong Xu, is the largest shareholder, holding 69% of shares outstanding. In comparison, the second and third largest shareholders hold about 3.4% and 3.3% of the stock.

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 Shanghai Geoharbour Construction Group

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 that insiders own more than half the Shanghai Geoharbour Construction Group Co., Ltd. stock. This gives them a lot of power. So they have a CN¥4.9b stake in this CN¥7.0b business. 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

The general public-- including retail investors -- own 15% 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. To that end, you should learn about the 2 warning signs we've spotted with Shanghai Geoharbour Construction Group (including 1 which is potentially serious) .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.