Shenzhen Fuanna Bedding and Furnishing Co.,Ltd's (SZSE:002327) CEO Guofang Lin is the most upbeat insider, and their holdings increased by 5.3% last week

Key Insights

• Significant insider control over Shenzhen Fuanna Bedding and FurnishingLtd implies vested interests in company growth
• The top 2 shareholders own 54% of the company
• Institutional ownership in Shenzhen Fuanna Bedding and FurnishingLtd is 21%

To get a sense of who is truly in control of Shenzhen Fuanna Bedding and Furnishing Co.,Ltd (SZSE:002327), it is important to understand the ownership structure of the business. With 54% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit CN¥7.5b market cap following a 5.3% gain in the stock.

Let's delve deeper into each type of owner of Shenzhen Fuanna Bedding and FurnishingLtd, beginning with the chart below.

See our latest analysis for Shenzhen Fuanna Bedding and FurnishingLtd

What Does The Institutional Ownership Tell Us About Shenzhen Fuanna Bedding and FurnishingLtd?

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 Fuanna Bedding and FurnishingLtd does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Shenzhen Fuanna Bedding and FurnishingLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Shenzhen Fuanna Bedding and FurnishingLtd. With a 40% stake, CEO Guofang Lin is the largest shareholder. For context, the second largest shareholder holds about 15% of the shares outstanding, followed by an ownership of 2.0% by the third-largest shareholder.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Shenzhen Fuanna Bedding and FurnishingLtd

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

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.

It seems that insiders own more than half the Shenzhen Fuanna Bedding and Furnishing Co.,Ltd stock. This gives them a lot of power. Given it has a market cap of CN¥7.5b, that means insiders have a whopping CN¥4.1b 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 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shenzhen Fuanna Bedding and FurnishingLtd. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shenzhen Fuanna Bedding and FurnishingLtd better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Shenzhen Fuanna Bedding and FurnishingLtd , and understanding them should be part of your investment process.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.