Key Insights

• Cofoe Medical TechnologyLtd'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 53% ownership
• Insider ownership in Cofoe Medical TechnologyLtd is 11%

A look at the shareholders of Cofoe Medical Technology Co.,Ltd. (SZSE:301087) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 47% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While private companies were the group that benefitted the most from last week's CN¥453m market cap gain, institutions too had a 25% share in those profits.

Let's delve deeper into each type of owner of Cofoe Medical TechnologyLtd, beginning with the chart below.

Check out our latest analysis for Cofoe Medical TechnologyLtd

What Does The Institutional Ownership Tell Us About Cofoe Medical TechnologyLtd?

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.

We can see that Cofoe Medical TechnologyLtd does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Cofoe Medical TechnologyLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Cofoe Medical TechnologyLtd. Our data shows that Changsha Xiezihao Medical Investment Co., Ltd. is the largest shareholder with 42% of shares outstanding. The second and third largest shareholders are Changsha Keyuan Tongchuang Enterprise Management Center (Limited Partnership) and Min Zhang, with an equal amount of shares to their name at 5.9%. Min Zhang, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Cofoe Medical TechnologyLtd

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

It seems insiders own a significant proportion of Cofoe Medical Technology Co.,Ltd.. Insiders own CN¥881m worth of shares in the CN¥7.7b company. That's quite meaningful. 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

The general public, who are usually individual investors, hold a 16% stake in Cofoe Medical 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.

Private Company Ownership

We can see that Private Companies own 47%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Cofoe Medical TechnologyLtd , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. So take a peek at this free 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.