Guangdong Huafeng New Energy Technology Co.,Ltd. (SZSE:002806) surges 11%; retail investors who own 55% shares profited along with insiders

Key Insights

• The considerable ownership by retail investors in Guangdong Huafeng New Energy TechnologyLtd indicates that they collectively have a greater say in management and business strategy
• A total of 18 investors have a majority stake in the company with 45% ownership
• Insider ownership in Guangdong Huafeng New Energy TechnologyLtd is 26%

Every investor in Guangdong Huafeng New Energy Technology Co.,Ltd. (SZSE:002806) should be aware of the most powerful shareholder groups. With 55% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While retail investors were the group that benefitted the most from last week’s CN¥251m market cap gain, insiders too had a 26% share in those profits.

In the chart below, we zoom in on the different ownership groups of Guangdong Huafeng New Energy TechnologyLtd.

See our latest analysis for Guangdong Huafeng New Energy TechnologyLtd

What Does The Institutional Ownership Tell Us About Guangdong Huafeng New Energy TechnologyLtd?

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.

We can see that Guangdong Huafeng New Energy TechnologyLtd does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Guangdong Huafeng New Energy TechnologyLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Guangdong Huafeng New Energy TechnologyLtd is not owned by hedge funds. Our data shows that Guo Ying Tan is the largest shareholder with 22% of shares outstanding. The second and third largest shareholders are Beijing Institute of Technology Asset Management Co., Ltd., and Cheng Lin, with an equal amount of shares to their name at 4.2%. Cheng Lin, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

Our studies suggest that the top 18 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Guangdong Huafeng New Energy TechnologyLtd

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. 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 a reasonable proportion of Guangdong Huafeng New Energy Technology Co.,Ltd.. Insiders have a CN¥635m stake in this CN¥2.4b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 55% of Guangdong Huafeng New Energy TechnologyLtd shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

We can see that Private Companies own 10%, of the shares on issue. 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 Guangdong Huafeng New Energy TechnologyLtd better, we need to consider many other factors. For example, we've discovered 3 warning signs for Guangdong Huafeng New Energy TechnologyLtd (2 make us uncomfortable!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.