Insiders were the key beneficiaries as Guangdong Shenling Environmental Systems Co., Ltd.'s (SZSE:301018) market cap rises to CN¥11b

Key Insights

• Significant insider control over Guangdong Shenling Environmental Systems implies vested interests in company growth
• A total of 4 investors have a majority stake in the company with 54% ownership
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Guangdong Shenling Environmental Systems Co., Ltd. (SZSE:301018) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 39% 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 5.8% gain.

In the chart below, we zoom in on the different ownership groups of Guangdong Shenling Environmental Systems.

View our latest analysis for Guangdong Shenling Environmental Systems

What Does The Institutional Ownership Tell Us About Guangdong Shenling Environmental Systems?

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 Guangdong Shenling Environmental Systems does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Guangdong Shenling Environmental Systems, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Guangdong Shenling Environmental Systems. Yingqi Cui is currently the company's largest shareholder with 21% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 11% of the stock. Bingwen Tan, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

Our research also brought to light the fact that roughly 54% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Guangdong Shenling Environmental Systems

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Guangdong Shenling Environmental Systems Co., Ltd.. Insiders own CN¥4.1b worth of shares in the CN¥11b company. That's quite meaningful. 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

With a 27% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Guangdong Shenling Environmental Systems. 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

Our data indicates that Private Companies hold 28%, of the company's shares. 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:

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. Case in point: We've spotted 2 warning signs for Guangdong Shenling Environmental Systems you should be aware of, and 1 of them is significant.

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.