Shenzhen FRD Science & Technology Co., Ltd. (SZSE:300602) insiders, who hold 55% of the firm would be disappointed by the recent pullback

Key Insights

• Insiders appear to have a vested interest in Shenzhen FRD Science & Technology's growth, as seen by their sizeable ownership
• 50% of the business is held by the top 2 shareholders
• Institutions own 15% of Shenzhen FRD Science & Technology

A look at the shareholders of Shenzhen FRD Science & Technology Co., Ltd. (SZSE:300602) can tell us which group is most powerful. The group holding the most number of shares in the company, around 55% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 15% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Shenzhen FRD Science & Technology.

See our latest analysis for Shenzhen FRD Science & Technology

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

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.

As you can see, institutional investors have a fair amount of stake in Shenzhen FRD Science & 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Shenzhen FRD Science & Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

Shenzhen FRD Science & Technology is not owned by hedge funds. Fei Ma is currently the company's largest shareholder with 48% of shares outstanding. 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.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

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. Given it has a market cap of CN¥8.3b, that means insiders have a whopping CN¥4.6b worth of shares in their own names. 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

With a 27% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shenzhen FRD Science & Technology. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 3.1%, of the Shenzhen FRD Science & Technology stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shenzhen FRD Science & Technology better, we need to consider many other factors.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.