Key Insights

• Significant insider control over Henan Thinker Automatic EquipmentLtd implies vested interests in company growth
• A total of 4 investors have a majority stake in the company with 57% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Henan Thinker Automatic Equipment Co.,Ltd. (SHSE:603508) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 58% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by CN¥473m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Henan Thinker Automatic EquipmentLtd.

What Does The Institutional Ownership Tell Us About Henan Thinker Automatic EquipmentLtd?

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 Henan Thinker Automatic EquipmentLtd 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. 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 Henan Thinker Automatic EquipmentLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Henan Thinker Automatic EquipmentLtd. Jie Guo is currently the largest shareholder, with 20% of shares outstanding. With 14% and 11% of the shares outstanding respectively, Wei Ping Wang and Jianzhou Zhao are the second and third largest shareholders. Jianzhou Zhao, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

On looking further, we found that 57% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Henan Thinker Automatic EquipmentLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 Henan Thinker Automatic Equipment Co.,Ltd. stock. This gives them a lot of power. That means insiders have a very meaningful CN¥4.9b stake in this CN¥8.6b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Henan Thinker Automatic EquipmentLtd. 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.

Public Company Ownership

We can see that public companies hold 4.6% of the Henan Thinker Automatic EquipmentLtd shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Henan Thinker Automatic EquipmentLtd better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Henan Thinker Automatic EquipmentLtd you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.