Sanhe Tongfei Refrigeration Co., Ltd. (SZSE:300990) adds CN¥591m in market cap and insiders have a 72% stake in that gain

Key Insights

• Sanhe Tongfei Refrigeration's significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 63% ownership
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of Sanhe Tongfei Refrigeration Co., Ltd. (SZSE:300990) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 72% ownership. 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 9.0% gain.

In the chart below, we zoom in on the different ownership groups of Sanhe Tongfei Refrigeration.

View our latest analysis for Sanhe Tongfei Refrigeration

What Does The Institutional Ownership Tell Us About Sanhe Tongfei Refrigeration?

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.

Since institutions own only a small portion of Sanhe Tongfei Refrigeration, 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. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

We note that hedge funds don't have a meaningful investment in Sanhe Tongfei Refrigeration. Looking at our data, we can see that the largest shareholder is Guoshan Zhang with 33% of shares outstanding. Haolei Zhang is the second largest shareholder owning 30% of common stock, and Li Li holds about 6.3% of the company stock. Interestingly, the bottom two of the top three shareholders also hold the title of Chief Executive Officer and Member of the Board of Directors, respectively, suggesting that these insiders have a personal stake in the company.

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 63% stake.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Sanhe Tongfei Refrigeration

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems that insiders own more than half the Sanhe Tongfei Refrigeration Co., Ltd. stock. This gives them a lot of power. So they have a CN¥5.2b stake in this CN¥7.2b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 23% stake in Sanhe Tongfei Refrigeration. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sanhe Tongfei Refrigeration better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Sanhe Tongfei Refrigeration 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.