The recent CN¥303m market cap decrease is likely to have disappointed insiders invested in Nantong Chaoda Equipment Co.,Ltd. (SZSE:301186)

Key Insights

• Significant insider control over Nantong Chaoda EquipmentLtd implies vested interests in company growth
• The largest shareholder of the company is Jianjun Feng with a 62% stake
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Nantong Chaoda Equipment Co.,Ltd. (SZSE:301186), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 70% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 12% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of Nantong Chaoda EquipmentLtd, beginning with the chart below.

View our latest analysis for Nantong Chaoda EquipmentLtd

What Does The Institutional Ownership Tell Us About Nantong Chaoda 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.

Since institutions own only a small portion of Nantong Chaoda EquipmentLtd, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Hedge funds don't have many shares in Nantong Chaoda EquipmentLtd. The company's largest shareholder is Jianjun Feng, with ownership of 62%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 6.8% and 4.1% of the shares outstanding respectively, Feng Feng and Nantong Zhongda Investment Management Center (Limited Partnership) are the second and third largest shareholders. Feng Feng, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Nantong Chaoda EquipmentLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 that insiders own more than half the Nantong Chaoda Equipment Co.,Ltd. stock. This gives them a lot of power. Given it has a market cap of CN¥2.3b, that means they have CN¥1.6b worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 22% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 4.1%, of the Nantong Chaoda EquipmentLtd 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 Nantong Chaoda EquipmentLtd better, we need to consider many other factors. Be aware that Nantong Chaoda EquipmentLtd is showing 1 warning sign in our investment analysis , you should know about...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com