Guangzhou KDT Machinery Co.,Ltd. (SZSE:002833) CEO Mao Hong Li's holdings dropped 11% in value as a result of the recent pullback

Key Insights

• Significant insider control over Guangzhou KDT MachineryLtd implies vested interests in company growth
• A total of 3 investors have a majority stake in the company with 55% ownership
• 16% of Guangzhou KDT MachineryLtd is held by Institutions

To get a sense of who is truly in control of Guangzhou KDT Machinery Co.,Ltd. (SZSE:002833), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 54% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 11% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Guangzhou KDT MachineryLtd.

View our latest analysis for Guangzhou KDT MachineryLtd

What Does The Institutional Ownership Tell Us About Guangzhou KDT MachineryLtd?

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.

Guangzhou KDT MachineryLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Guangzhou KDT MachineryLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Guangzhou KDT MachineryLtd. The company's CEO Mao Hong Li is the largest shareholder with 39% of shares outstanding. With 9.6% and 6.7% of the shares outstanding respectively, Yu Hua Liu and National Council for Social Security Fund are the second and third largest shareholders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Guangzhou KDT MachineryLtd

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.

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 Guangzhou KDT Machinery Co.,Ltd.. This gives them effective control of the company. So they have a CN¥3.7b stake in this CN¥6.9b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 24% stake in Guangzhou KDT MachineryLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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 Guangzhou KDT MachineryLtd that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.