Insiders the biggest winners as Contec Medical Systems Co.,Ltd's (SZSE:300869) market cap rises to CN¥5.4b

Key Insights

• Insiders appear to have a vested interest in Contec Medical SystemsLtd's growth, as seen by their sizeable ownership
• A total of 2 investors have a majority stake in the company with 60% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Contec Medical Systems Co.,Ltd (SZSE:300869) should be aware of the most powerful shareholder groups. With 63% stake, individual insiders 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).

As a result, insiders were the biggest beneficiaries of last week’s 7.1% gain.

In the chart below, we zoom in on the different ownership groups of Contec Medical SystemsLtd.

View our latest analysis for Contec Medical SystemsLtd

What Does The Institutional Ownership Tell Us About Contec Medical SystemsLtd?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Less than 5% of Contec Medical SystemsLtd is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

We note that hedge funds don't have a meaningful investment in Contec Medical SystemsLtd. Our data shows that Kun Hu is the largest shareholder with 47% of shares outstanding. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 0.7% by the third-largest shareholder. Yang Zhishan, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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

Insider Ownership Of Contec Medical SystemsLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

It seems that insiders own more than half the Contec Medical Systems Co.,Ltd stock. This gives them a lot of power. So they have a CN¥3.4b stake in this CN¥5.4b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 36% 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:

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. For instance, we've identified 4 warning signs for Contec Medical SystemsLtd (2 shouldn't be ignored) that you should be aware of.

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.

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