Key Insights

• The considerable ownership by retail investors in Shenzhen Farben Information TechnologyLtd indicates that they collectively have a greater say in management and business strategy
• The top 14 shareholders own 50% of the company
• Insiders own 39% of Shenzhen Farben Information TechnologyLtd

To get a sense of who is truly in control of Shenzhen Farben Information Technology Co.,Ltd. (SZSE:300925), it is important to understand the ownership structure of the business. With 45% 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).

While the holdings of retail investors took a hit after last week's 12% price drop, insiders with their 39% also suffered.

Let's take a closer look to see what the different types of shareholders can tell us about Shenzhen Farben Information TechnologyLtd.

What Does The Institutional Ownership Tell Us About Shenzhen Farben Information TechnologyLtd?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Shenzhen Farben Information TechnologyLtd. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Farben Information TechnologyLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Shenzhen Farben Information TechnologyLtd. With a 33% stake, CEO Hua Yan is the largest shareholder. The second and third largest shareholders are Shenzhen Jiajiatong Investment Partnership Enterprise (Limited Partnership) and Shenzhen Mujialin Investment Partnership Enterprise (Limited Partnership), with an equal amount of shares to their name at 2.4%.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 14 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 Farben Information TechnologyLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems insiders own a significant proportion of Shenzhen Farben Information Technology Co.,Ltd.. Insiders own CN¥1.6b worth of shares in the CN¥4.1b 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, who are usually individual investors, hold a 45% stake in Shenzhen Farben Information TechnologyLtd. 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

It seems that Private Companies own 4.9%, of the Shenzhen Farben Information TechnologyLtd stock. 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 Farben Information TechnologyLtd better, we need to consider many other factors. Take risks for example - Shenzhen Farben Information TechnologyLtd has 2 warning signs we think you should be aware of.

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.