Following recent decline, Guangdong KinLong Hardware Products Co.,Ltd.'s (SZSE:002791) top shareholder CEO Bao Kun Bai sees holdings value drop by 7.0%

Key Insights

• Significant insider control over Guangdong KinLong Hardware ProductsLtd implies vested interests in company growth
• The top 4 shareholders own 54% of the company
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Guangdong KinLong Hardware Products Co.,Ltd. (SZSE:002791), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 60% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 7.0% decline in share price, insiders suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Guangdong KinLong Hardware ProductsLtd.

View our latest analysis for Guangdong KinLong Hardware ProductsLtd

What Does The Institutional Ownership Tell Us About Guangdong KinLong Hardware ProductsLtd?

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.

As you can see, institutional investors have a fair amount of stake in Guangdong KinLong Hardware ProductsLtd. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Guangdong KinLong Hardware ProductsLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Guangdong KinLong Hardware ProductsLtd. The company's CEO Bao Kun Bai is the largest shareholder with 34% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.1% and 6.7%, of the shares outstanding, respectively. Interestingly, the third-largest shareholder, Bao Ping Bai is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Guangdong KinLong Hardware ProductsLtd

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.

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.

Our information suggests that insiders own more than half of Guangdong KinLong Hardware Products Co.,Ltd.. This gives them effective control of the company. Insiders own CN¥6.1b worth of shares in the CN¥10b company. That's extraordinary! 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

The general public, who are usually individual investors, hold a 30% stake in Guangdong KinLong Hardware ProductsLtd. 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:

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. For instance, we've identified 1 warning sign for Guangdong KinLong Hardware ProductsLtd that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.