Individual investors are Kingfa Sci. & Tech. Co., Ltd.'s (SHSE:600143) biggest owners and were hit after market cap dropped CN¥3.0b

Key Insights

• Kingfa Sci. & Tech's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 25 shareholders own 42% of the company
• Insider ownership in Kingfa Sci. & Tech is 32%

Every investor in Kingfa Sci. & Tech. Co., Ltd. (SHSE:600143) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 58% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of individual investors took a hit after last week’s 8.9% price drop, insiders with their 32% also suffered.

Let's take a closer look to see what the different types of shareholders can tell us about Kingfa Sci. & Tech.

View our latest analysis for Kingfa Sci. & Tech

What Does The Institutional Ownership Tell Us About Kingfa Sci. & Tech?

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 Kingfa Sci. & Tech does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Kingfa Sci. & Tech'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 Kingfa Sci. & Tech. Zhimin Yuan is currently the company's largest shareholder with 20% of shares outstanding. For context, the second largest shareholder holds about 3.7% of the shares outstanding, followed by an ownership of 3.3% by the third-largest shareholder. Nan Jing Li, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Kingfa Sci. & Tech

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

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 Kingfa Sci. & Tech. Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥9.5b stake in this CN¥30b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 58% stake in Kingfa Sci. & Tech, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 3 warning signs we've spotted with Kingfa Sci. & Tech (including 1 which makes us a bit uncomfortable) .

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.