Guangdong Huafeng New Energy Technology Co.,Ltd.'s (SZSE:002806) market cap up CN¥171m last week, benefiting both retail investors who own 53% as well as 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
• 47% of the business is held by the top 21 shareholders
• Insider ownership in Guangdong Huafeng New Energy TechnologyLtd is 27%

Every investor in Guangdong Huafeng New Energy Technology Co.,Ltd. (SZSE:002806) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 53% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While retail investors were the group that benefitted the most from last week’s CN¥171m market cap gain, insiders too had a 27% share in those profits.

Let's delve deeper into each type of owner of Guangdong Huafeng New Energy TechnologyLtd, beginning with the chart below.

Check out 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.

Less than 5% of Guangdong Huafeng New Energy TechnologyLtd is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Guangdong Huafeng New Energy TechnologyLtd is not owned by hedge funds. Our data shows that Guo Ying Tan is the largest shareholder with 23% of shares outstanding. Guangdong Technology Venture Capital Co., Ltd. is the second largest shareholder owning 5.1% of common stock, and Beijing Institute of Technology Asset Management Co., Ltd., holds about 4.3% of the company stock. In addition, we found that Cheng Lin, the CEO has 4.3% of the shares allocated to their name.

Our studies suggest that the top 21 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 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. 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 Huafeng New Energy TechnologyLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 Huafeng New Energy Technology Co.,Ltd.. Insiders own CN¥502m worth of shares in the CN¥1.9b 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

The general public, mostly comprising of individual investors, collectively holds 53% of Guangdong Huafeng New Energy TechnologyLtd shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Equity Ownership

With a stake of 5.1%, private equity firms could influence the Guangdong Huafeng New Energy TechnologyLtd board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for Guangdong Huafeng New Energy TechnologyLtd you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free 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.