Nanjing CIGU Technology Corp.,LTD.'s (SHSE:688448) market cap increased by CN¥257m, insiders receive a 54% cut

Key Insights

• Insiders appear to have a vested interest in Nanjing CIGU TechnologyLTD's growth, as seen by their sizeable ownership
• 52% of the business is held by the top 4 shareholders
• Institutional ownership in Nanjing CIGU TechnologyLTD is 16%

If you want to know who really controls Nanjing CIGU Technology Corp.,LTD. (SHSE:688448), 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 54% 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).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥257m last week.

Let's delve deeper into each type of owner of Nanjing CIGU TechnologyLTD, beginning with the chart below.

Check out our latest analysis for Nanjing CIGU TechnologyLTD

What Does The Institutional Ownership Tell Us About Nanjing CIGU 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.

Nanjing CIGU TechnologyLTD already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Nanjing CIGU TechnologyLTD's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Nanjing CIGU TechnologyLTD. Our data shows that Lihua Wu is the largest shareholder with 18% of shares outstanding. With 16% and 11% of the shares outstanding respectively, Ningchen Wu and Nanjing Baolifeng Intelligent Equipment Manufacturing Partnership Enterprise (Limited Partnership) are the second and third largest shareholders. Ningchen Wu, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive. Furthermore, CEO Jiyong Dong is the owner of 3.4% of the company's shares.

On looking further, we found that 52% 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 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Nanjing CIGU 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.

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 most recent data indicates that insiders own the majority of Nanjing CIGU Technology Corp.,LTD.. This means they can collectively make decisions for the company. That means they own CN¥788m worth of shares in the CN¥1.4b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 18% 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.

Private Company Ownership

It seems that Private Companies own 11%, of the Nanjing CIGU TechnologyLTD stock. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - Nanjing CIGU TechnologyLTD has 2 warning signs (and 1 which makes us a bit uncomfortable) we think 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.