Shanghai QiFan Cable Co., Ltd (SHSE:605222) adds CN¥422m in market cap and insiders have a 70% stake in that gain

Key Insights

• Significant insider control over Shanghai QiFan Cable implies vested interests in company growth
• The top 3 shareholders own 65% of the company
• Institutional ownership in Shanghai QiFan Cable is 11%

If you want to know who really controls Shanghai QiFan Cable Co., Ltd (SHSE:605222), 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. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders were the biggest beneficiaries of last week’s 6.5% gain.

Let's delve deeper into each type of owner of Shanghai QiFan Cable, beginning with the chart below.

View our latest analysis for Shanghai QiFan Cable

What Does The Institutional Ownership Tell Us About Shanghai QiFan Cable?

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 QiFan Cable 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 QiFan Cable's earnings history below. Of course, the future is what really matters.

Shanghai QiFan Cable is not owned by hedge funds. The company's largest shareholder is Guihua Zhou, with ownership of 23%. For context, the second largest shareholder holds about 23% of the shares outstanding, followed by an ownership of 18% by the third-largest shareholder. Interestingly, the bottom two of the top three shareholders also hold the title of Chief Executive Officer and Vice Chairman, respectively, suggesting that these insiders have a personal stake in the company.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 65% stake.

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. 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 QiFan Cable

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. 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.

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.

Our information suggests that insiders own more than half of Shanghai QiFan Cable Co., Ltd. This gives them effective control of the company. Given it has a market cap of CN¥6.9b, that means they have CN¥4.8b 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 17% 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Shanghai QiFan Cable (of which 1 is a bit unpleasant!) you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.