Guangzhou Huayan Precision Machinery Co.,Ltd.'s (SZSE:301138) CEO Shixu Wen is the most upbeat insider, and their holdings increased by 26% last week

Key Insights

• Guangzhou Huayan Precision MachineryLtd's significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 71% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Guangzhou Huayan Precision Machinery Co.,Ltd. (SZSE:301138), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 71% 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.

As a result, insiders were the biggest beneficiaries of last week’s 26% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Guangzhou Huayan Precision MachineryLtd.

View our latest analysis for Guangzhou Huayan Precision MachineryLtd

What Does The Institutional Ownership Tell Us About Guangzhou Huayan Precision MachineryLtd?

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.

Institutions have a very small stake in Guangzhou Huayan Precision MachineryLtd. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. 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 Guangzhou Huayan Precision MachineryLtd. Looking at our data, we can see that the largest shareholder is the CEO Shixu Wen with 36% of shares outstanding. With 36% and 3.6% of the shares outstanding respectively, Helin Bao and Guangzhou Baochuang Investment Center (Limited Partnership) are the second and third largest shareholders.

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.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Guangzhou Huayan Precision MachineryLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 Guangzhou Huayan Precision Machinery Co.,Ltd.. This means they can collectively make decisions for the company. Given it has a market cap of CN¥3.3b, that means they have CN¥2.4b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Guangzhou Huayan Precision MachineryLtd. 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

We can see that Private Companies own 3.6%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Guangzhou Huayan Precision MachineryLtd better, we need to consider many other factors. For instance, we've identified 3 warning signs for Guangzhou Huayan Precision MachineryLtd that you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.