Sichuan Gangtong Medical Equipment Group Co., Ltd (SZSE:301515) surges 11%; individual investors who own 39% shares profited along with insiders

Key Insights

• The considerable ownership by individual investors in Sichuan Gangtong Medical Equipment Group indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 6 shareholders
• Insider ownership in Sichuan Gangtong Medical Equipment Group is 37%

Every investor in Sichuan Gangtong Medical Equipment Group Co., Ltd (SZSE:301515) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 39% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While individual investors were the group that benefitted the most from last week’s CN¥200m market cap gain, insiders too had a 37% share in those profits.

Let's delve deeper into each type of owner of Sichuan Gangtong Medical Equipment Group, beginning with the chart below.

View our latest analysis for Sichuan Gangtong Medical Equipment Group

What Does The Institutional Ownership Tell Us About Sichuan Gangtong Medical Equipment Group?

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.

As you can see, institutional investors have a fair amount of stake in Sichuan Gangtong Medical Equipment Group. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Sichuan Gangtong Medical Equipment Group, (below). Of course, keep in mind that there are other factors to consider, too.

Our data indicates that hedge funds own 12% of Sichuan Gangtong Medical Equipment Group. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. The company's CEO Chen Yong is the largest shareholder with 28% of shares outstanding. In comparison, the second and third largest shareholders hold about 12% and 3.8% of the stock.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. 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 Sichuan Gangtong Medical Equipment Group

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.

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.

It seems insiders own a significant proportion of Sichuan Gangtong Medical Equipment Group Co., Ltd. It has a market capitalization of just CN¥2.1b, and insiders have CN¥774m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 39% stake in Sichuan Gangtong Medical Equipment Group. 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 2 warning signs for Sichuan Gangtong Medical Equipment Group (1 is concerning) that you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free 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.

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