Insiders were the biggest winners as EMTEK (Shenzhen) Co., Ltd.'s (SZSE:300938) market cap grew by CN¥365m last week

Key Insights

• Significant insider control over EMTEK (Shenzhen) implies vested interests in company growth
• 51% of the business is held by the top 9 shareholders
• Institutional ownership in EMTEK (Shenzhen) is 17%

A look at the shareholders of EMTEK (Shenzhen) Co., Ltd. (SZSE:300938) can tell us which group is most powerful. With 41% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit CN¥2.7b market cap following a 15% gain in the stock.

In the chart below, we zoom in on the different ownership groups of EMTEK (Shenzhen).

See our latest analysis for EMTEK (Shenzhen)

What Does The Institutional Ownership Tell Us About EMTEK (Shenzhen)?

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.

As you can see, institutional investors have a fair amount of stake in EMTEK (Shenzhen). This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 EMTEK (Shenzhen), (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in EMTEK (Shenzhen). Jie Zhong Lv is currently the largest shareholder, with 19% of shares outstanding. In comparison, the second and third largest shareholders hold about 15% and 3.5% of the stock. Furthermore, CEO Jianjun Wang is the owner of 1.3% of the company's shares.

We also observed that the top 9 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. 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 EMTEK (Shenzhen)

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. 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.

Our most recent data indicates that insiders own a reasonable proportion of EMTEK (Shenzhen) Co., Ltd.. It has a market capitalization of just CN¥2.7b, and insiders have CN¥1.1b worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 39% ownership, the general public, mostly comprising of individual investors, have some degree of sway over EMTEK (Shenzhen). 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

It seems that Private Companies own 3.5%, of the EMTEK (Shenzhen) stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for EMTEK (Shenzhen) you should know about.

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.