Shenzhen FRD Science & Technology Co., Ltd. (SZSE:300602) adds CN¥621m in market cap and insiders have a 55% stake in that gain

Key Insights

• Shenzhen FRD Science & Technology's significant insider ownership suggests inherent interests in company's expansion
• The top 2 shareholders own 50% of the company
• Institutions own 11% of Shenzhen FRD Science & Technology

Every investor in Shenzhen FRD Science & Technology Co., Ltd. (SZSE:300602) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 55% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 5.4% gain.

Let's delve deeper into each type of owner of Shenzhen FRD Science & Technology, beginning with the chart below.

See our latest analysis for Shenzhen FRD Science & Technology

What Does The Institutional Ownership Tell Us About Shenzhen FRD Science & 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.

We can see that Shenzhen FRD Science & Technology does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Shenzhen FRD Science & Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Shenzhen FRD Science & Technology is not owned by hedge funds. The company's largest shareholder is Fei Ma, with ownership of 48%. With 2.8% and 2.5% of the shares outstanding respectively, Hui Ming Sun and Jun Ma are the second and third largest shareholders. Jun Ma, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 50% stake.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Shenzhen FRD Science & Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own the majority of Shenzhen FRD Science & Technology Co., Ltd.. This means they can collectively make decisions for the company. That means insiders have a very meaningful CN¥6.7b stake in this CN¥12b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in Shenzhen FRD Science & Technology. 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 3.1%, of the Shenzhen FRD Science & Technology stock. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that Shenzhen FRD Science & Technology is showing 1 warning sign in our investment analysis , you should know about...

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.