Individual investors who hold 40% of Guangzhou Ruoyuchen Technology Co.,Ltd. (SZSE:003010) gained 13%, insiders profited as well

Key Insights

• Significant control over Guangzhou Ruoyuchen TechnologyLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 4 investors have a majority stake in the company with 52% ownership
• Insiders own 37% of Guangzhou Ruoyuchen TechnologyLtd

A look at the shareholders of Guangzhou Ruoyuchen Technology Co.,Ltd. (SZSE:003010) can tell us which group is most powerful. With 40% stake, individual investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Individual investors gained the most after market cap touched CN¥2.7b last week, while insiders who own 37% also benefitted.

Let's delve deeper into each type of owner of Guangzhou Ruoyuchen TechnologyLtd, beginning with the chart below.

Check out our latest analysis for Guangzhou Ruoyuchen TechnologyLtd

What Does The Institutional Ownership Tell Us About Guangzhou Ruoyuchen TechnologyLtd?

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.

Since institutions own only a small portion of Guangzhou Ruoyuchen TechnologyLtd, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Hedge funds don't have many shares in Guangzhou Ruoyuchen TechnologyLtd. The company's CEO Yu Wang is the largest shareholder with 30% of shares outstanding. With 10% and 8.3% of the shares outstanding respectively, Lancy Co., Ltd. and Tianjin Ruoyuchen Enterprise Management Consulting Partnership Enterprise (Limited Partnership) are the second and third largest shareholders.

On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Guangzhou Ruoyuchen TechnologyLtd

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own a reasonable proportion of Guangzhou Ruoyuchen Technology Co.,Ltd.. It has a market capitalization of just CN¥2.7b, and insiders have CN¥993m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Guangzhou Ruoyuchen TechnologyLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 8.3%, of the company's shares. 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.

Public Company Ownership

We can see that public companies hold 10% of the Guangzhou Ruoyuchen TechnologyLtd shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

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 2 warning signs for Guangzhou Ruoyuchen TechnologyLtd (1 doesn't sit too well with us!) that you should be aware of before investing here.

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.