Guangdong Feinan Resources Recycling Co., Ltd (SZSE:301500) insiders have significant skin in the game with 72% ownership

Key Insights

• Significant insider control over Guangdong Feinan Resources Recycling implies vested interests in company growth
• The top 2 shareholders own 72% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Guangdong Feinan Resources Recycling Co., Ltd (SZSE:301500), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 72% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

So it follows, every decision made by insiders of Guangdong Feinan Resources Recycling regarding the company's future would be crucial to them.

In the chart below, we zoom in on the different ownership groups of Guangdong Feinan Resources Recycling.

See our latest analysis for Guangdong Feinan Resources Recycling

What Does The Lack Of Institutional Ownership Tell Us About Guangdong Feinan Resources Recycling?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Guangdong Feinan Resources Recycling's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

We note that hedge funds don't have a meaningful investment in Guangdong Feinan Resources Recycling. Xuejuan He is currently the largest shareholder, with 36% of shares outstanding. For context, the second largest shareholder holds about 36% of the shares outstanding, followed by an ownership of 5.8% by the third-largest shareholder. Yanjun Sun, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 72% stake.

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 Guangdong Feinan Resources Recycling

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 Guangdong Feinan Resources Recycling Co., Ltd. This means they can collectively make decisions for the company. Given it has a market cap of CN¥8.4b, that means insiders have a whopping CN¥6.0b worth of shares in their own names. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Guangdong Feinan Resources Recycling. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 5.8% stake in Guangdong Feinan Resources Recycling. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

We can see that Private Companies own 4.6%, of the shares on issue. 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. Take risks for example - Guangdong Feinan Resources Recycling has 3 warning signs (and 2 which make us uncomfortable) we think you should know about.

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.