Guangdong Jinming Machinery Co., Ltd.'s (SZSE:300281) last week's 15% decline must have disappointed individual investors who have a significant stake

Key Insights

• Significant control over Guangdong Jinming Machinery by individual investors implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 4 shareholders
• 24% of Guangdong Jinming Machinery is held by insiders

If you want to know who really controls Guangdong Jinming Machinery Co., Ltd. (SZSE:300281), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual investors with 43% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, individual investors endured the biggest losses as the stock fell by 15%.

In the chart below, we zoom in on the different ownership groups of Guangdong Jinming Machinery.

Check out our latest analysis for Guangdong Jinming Machinery

What Does The Institutional Ownership Tell Us About Guangdong Jinming Machinery?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Less than 5% of Guangdong Jinming Machinery 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. So if the company itself can improve over time, we may well see more institutional buyers in the future. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Guangdong Jinming Machinery is not owned by hedge funds. The company's largest shareholder is GuangZhou Wanbao Group Company Limited, with ownership of 27%. For context, the second largest shareholder holds about 17% of the shares outstanding, followed by an ownership of 4.4% by the third-largest shareholder. Jiazhen Ma, who is the third-largest shareholder, also happens to hold the title of Vice Chairman.

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. 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 Jinming Machinery

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.

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.

It seems insiders own a significant proportion of Guangdong Jinming Machinery Co., Ltd.. Insiders have a CN¥427m stake in this CN¥1.8b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 43% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 29%, of the Guangdong Jinming Machinery stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Guangdong Jinming Machinery better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Guangdong Jinming Machinery you should be aware of, and 1 of them is concerning.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.