Guang Dong Sitong Group Co.,Ltd (SHSE:603838) adds CN¥323m in market cap and insiders have a 63% stake in that gain

Key Insights

• Insiders appear to have a vested interest in Guang Dong Sitong GroupLtd's growth, as seen by their sizeable ownership
• 50% of the business is held by the top 6 shareholders
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Guang Dong Sitong Group Co.,Ltd (SHSE:603838) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 63% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders were the biggest beneficiaries of last week’s 16% gain.

Let's delve deeper into each type of owner of Guang Dong Sitong GroupLtd, beginning with the chart below.

View our latest analysis for Guang Dong Sitong GroupLtd

What Does The Lack Of Institutional Ownership Tell Us About Guang Dong Sitong GroupLtd?

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 multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Guang Dong Sitong GroupLtd, for yourself, below.

Hedge funds don't have many shares in Guang Dong Sitong GroupLtd. The company's largest shareholder is Jianping Huang, with ownership of 28%. The second and third largest shareholders are Zhen Cheng Cai and Zhen Huang Cai, with an equal amount of shares to their name at 4.5%. Additionally, the company's CEO Zhen Tong Cai directly holds 4.5% of the total shares outstanding.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 Guang Dong Sitong GroupLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders own more than half of Guang Dong Sitong Group Co.,Ltd. This gives them effective control of the company. Given it has a market cap of CN¥2.4b, that means they have CN¥1.5b 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

The general public-- including retail investors -- own 37% 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 1 warning sign for Guang Dong Sitong GroupLtd that you should be aware of before investing here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.