Retail investors who hold 40% of Xuchang KETOP Testing Research Institute Co.,Ltd (SZSE:003008) gained 16%, insiders profited as well

Key Insights

• The considerable ownership by retail investors in Xuchang KETOP Testing Research InstituteLtd indicates that they collectively have a greater say in management and business strategy
• A total of 3 investors have a majority stake in the company with 51% ownership
• 35% of Xuchang KETOP Testing Research InstituteLtd is held by insiders

Every investor in Xuchang KETOP Testing Research Institute Co.,Ltd (SZSE:003008) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 40% 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 16% price gain, insiders also received a 35% cut.

In the chart below, we zoom in on the different ownership groups of Xuchang KETOP Testing Research InstituteLtd.

Check out our latest analysis for Xuchang KETOP Testing Research InstituteLtd

What Does The Institutional Ownership Tell Us About Xuchang KETOP Testing Research InstituteLtd?

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.

Since institutions own only a small portion of Xuchang KETOP Testing Research InstituteLtd, 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 Xuchang KETOP Testing Research InstituteLtd. Xuchang KETOP Electric Research Institute Co., Ltd. is currently the company's largest shareholder with 23% of shares outstanding. Zhiqing Yao is the second largest shareholder owning 17% of common stock, and Yaping Li holds about 11% of the company stock. Yaping Li, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Xuchang KETOP Testing Research InstituteLtd

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

It seems insiders own a significant proportion of Xuchang KETOP Testing Research Institute Co.,Ltd. Insiders own CN¥683m worth of shares in the CN¥2.0b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 40% stake in the company, and hence can't easily be ignored. 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 23%, of the Xuchang KETOP Testing Research InstituteLtd stock. 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 Xuchang KETOP Testing Research InstituteLtd better, we need to consider many other factors. For instance, we've identified 2 warning signs for Xuchang KETOP Testing Research InstituteLtd that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.