Guangdong Topstar Technology Co., Ltd.'s (SZSE:300607) market cap rose CN¥1.8b last week; retail investors who hold 58% profited and so did insiders

Key Insights

• The considerable ownership by retail investors in Guangdong Topstar Technology indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 42% of the company
• Insiders own 40% of Guangdong Topstar Technology

If you want to know who really controls Guangdong Topstar Technology Co., Ltd. (SZSE:300607), 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 retail investors with 58% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While retail investors were the group that reaped the most benefits after last week’s 13% price gain, insiders also received a 40% cut.

Let's take a closer look to see what the different types of shareholders can tell us about Guangdong Topstar Technology.

Check out our latest analysis for Guangdong Topstar Technology

What Does The Institutional Ownership Tell Us About Guangdong Topstar 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.

Since institutions own only a small portion of Guangdong Topstar Technology, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Guangdong Topstar Technology. Looking at our data, we can see that the largest shareholder is the CEO Fengli Wu with 31% of shares outstanding. For context, the second largest shareholder holds about 4.8% of the shares outstanding, followed by an ownership of 3.8% by the third-largest shareholder. Note that two of the top three shareholders are also Senior Key Executive and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Guangdong Topstar 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 information suggests that insiders maintain a significant holding in Guangdong Topstar Technology Co., Ltd.. It has a market capitalization of just CN¥16b, and insiders have CN¥6.2b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 58% of Guangdong Topstar Technology shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Guangdong Topstar Technology is showing 1 warning sign in our investment analysis , you should know about...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.