Individual investors in Anhui Fuhuang Steel Structure Co., Ltd. (SZSE:002743) are its biggest bettors, and their bets paid off as stock gained 10% last week

Key Insights

• The considerable ownership by individual investors in Anhui Fuhuang Steel Structure indicates that they collectively have a greater say in management and business strategy
• 44% of the business is held by the top 25 shareholders
• 11% of Anhui Fuhuang Steel Structure is held by Institutions

To get a sense of who is truly in control of Anhui Fuhuang Steel Structure Co., Ltd. (SZSE:002743), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 56% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, individual investors were the biggest beneficiaries of last week’s 10% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Anhui Fuhuang Steel Structure.

Check out our latest analysis for Anhui Fuhuang Steel Structure

What Does The Institutional Ownership Tell Us About Anhui Fuhuang Steel Structure?

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.

We can see that Anhui Fuhuang Steel Structure 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Anhui Fuhuang Steel Structure's earnings history below. Of course, the future is what really matters.

Anhui Fuhuang Steel Structure is not owned by hedge funds. Anhui Fuhuang Construction Co., Ltd. is currently the largest shareholder, with 33% of shares outstanding. With 4.8% and 1.9% of the shares outstanding respectively, Zhongrong International Trust Co., Ltd. and First State Cinda Fund Management Company Limited are the second and third largest shareholders.

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.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Anhui Fuhuang Steel Structure

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our information suggests that Anhui Fuhuang Steel Structure Co., Ltd. insiders own under 1% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. It has a market capitalization of just CN¥3.7b, and the board has only CN¥7.8m worth of shares in their own names. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 56% stake in Anhui Fuhuang Steel Structure, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

We can see that Private Companies own 33%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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 instance, we've identified 4 warning signs for Anhui Fuhuang Steel Structure (2 are a bit 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.