Stock Analysis
- China
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- Electrical
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- SZSE:000533
Guangdong Shunna Electric Co., Ltd's (SZSE:000533) last week's 14% decline must have disappointed retail investors who have a significant stake
Key Insights
- The considerable ownership by retail investors in Guangdong Shunna Electric indicates that they collectively have a greater say in management and business strategy
- 50% of the business is held by the top 24 shareholders
- Insiders own 21% of Guangdong Shunna Electric
Every investor in Guangdong Shunna Electric Co., Ltd (SZSE:000533) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 50% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While insiders who own 21% came under pressure after market cap dropped to CN¥4.4b last week,retail investors took the most losses.
Let's take a closer look to see what the different types of shareholders can tell us about Guangdong Shunna Electric.
See our latest analysis for Guangdong Shunna Electric
What Does The Institutional Ownership Tell Us About Guangdong Shunna Electric?
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 Guangdong Shunna Electric. 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 Guangdong Shunna Electric's earnings history below. Of course, the future is what really matters.
Guangdong Shunna Electric is not owned by hedge funds. Our data shows that Guangzhou Huifu Boyan Investment Partnership Enterprise LP is the largest shareholder with 17% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 13% and 7.9%, of the shares outstanding, respectively. Yi Cheng Zhang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.
After doing some more digging, we found that the top 24 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over 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 Guangdong Shunna Electric
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.
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 Guangdong Shunna Electric Co., Ltd. Insiders own CN¥946m worth of shares in the CN¥4.4b 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
With a 50% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Guangdong Shunna Electric. 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 18%, of the Guangdong Shunna Electric stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 1 warning sign for Guangdong Shunna Electric that you should be aware of before investing here.
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.
About SZSE:000533
Guangdong Shunna Electric
Provides power transmission and distribution equipment in China.