Shenzhen Kaizhong Precision Technology Co., Ltd.'s (SZSE:002823) market cap up CN¥424m last week, benefiting both retail investors who own 47% as well as insiders

Key Insights

• Significant control over Shenzhen Kaizhong Precision Technology by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 9 shareholders own 50% of the company
• 45% of Shenzhen Kaizhong Precision Technology is held by insiders

If you want to know who really controls Shenzhen Kaizhong Precision Technology Co., Ltd. (SZSE:002823), 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 47% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

Retail investors gained the most after market cap touched CN¥5.4b last week, while insiders who own 45% also benefitted.

Let's delve deeper into each type of owner of Shenzhen Kaizhong Precision Technology, beginning with the chart below.

Check out our latest analysis for Shenzhen Kaizhong Precision Technology

What Does The Institutional Ownership Tell Us About Shenzhen Kaizhong Precision Technology?

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.

As you can see, institutional investors have a fair amount of stake in Shenzhen Kaizhong Precision Technology. 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. 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 Shenzhen Kaizhong Precision Technology's earnings history below. Of course, the future is what really matters.

Shenzhen Kaizhong Precision Technology is not owned by hedge funds. With a 24% stake, CEO Hao Yu Zhang is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 20% and 2.5%, of the shares outstanding, respectively.

We also observed that the top 9 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. 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 Shenzhen Kaizhong Precision Technology

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

It seems insiders own a significant proportion of Shenzhen Kaizhong Precision Technology Co., Ltd.. It has a market capitalization of just CN¥5.4b, and insiders have CN¥2.5b worth of shares in their own names. 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-- including retail investors -- own 47% 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.

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 2 warning signs for Shenzhen Kaizhong Precision Technology that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.