ShenZhen GAD Environmental Technology Co., Ltd.'s (SZSE:300854) largest shareholder, CEO Fang Ge sees holdings value fall by 11% following recent drop

Key Insights

• Significant insider control over ShenZhen GAD Environmental Technology implies vested interests in company growth
• The top 5 shareholders own 53% of the company
• Institutions own 17% of ShenZhen GAD Environmental Technology

A look at the shareholders of ShenZhen GAD Environmental Technology Co., Ltd. (SZSE:300854) can tell us which group is most powerful. The group holding the most number of shares in the company, around 53% 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 market cap fell to CN¥1.0b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of ShenZhen GAD Environmental Technology.

View our latest analysis for ShenZhen GAD Environmental Technology

What Does The Institutional Ownership Tell Us About ShenZhen GAD Environmental Technology?

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.

We can see that ShenZhen GAD Environmental Technology does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at ShenZhen GAD Environmental Technology's earnings history below. Of course, the future is what really matters.

ShenZhen GAD Environmental Technology is not owned by hedge funds. With a 23% stake, CEO Fang Ge is the largest shareholder. Xiongjun Kong is the second largest shareholder owning 13% of common stock, and Qingsong Liu holds about 11% of the company stock. Interestingly, the third-largest shareholder, Qingsong Liu is also a Vice Chairman, again, indicating strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 ShenZhen GAD Environmental Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

It seems that insiders own more than half the ShenZhen GAD Environmental Technology Co., Ltd. stock. This gives them a lot of power. So they have a CN¥545m stake in this CN¥1.0b business. 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

The general public-- including retail investors -- own 30% stake in the company, and hence can't easily be ignored. 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 ShenZhen GAD Environmental Technology better, we need to consider many other factors. Take risks for example - ShenZhen GAD Environmental Technology has 6 warning signs (and 1 which can't be ignored) we think you should know about.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.