Huafon Microfibre (Shanghai) Co., Ltd. (SZSE:300180) surges 6.4%; individual investors who own 59% shares profited along with insiders

Key Insights

• The considerable ownership by individual investors in Huafon Microfibre (Shanghai) indicates that they collectively have a greater say in management and business strategy
• 41% of the business is held by the top 25 shareholders
• 24% of Huafon Microfibre (Shanghai) is held by insiders

A look at the shareholders of Huafon Microfibre (Shanghai) Co., Ltd. (SZSE:300180) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 59% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Individual investors gained the most after market cap touched CN¥6.5b last week, while insiders who own 24% also benefitted.

Let's delve deeper into each type of owner of Huafon Microfibre (Shanghai), beginning with the chart below.

See our latest analysis for Huafon Microfibre (Shanghai)

What Does The Institutional Ownership Tell Us About Huafon Microfibre (Shanghai)?

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.

Huafon Microfibre (Shanghai) already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Huafon Microfibre (Shanghai), (below). Of course, keep in mind that there are other factors to consider, too.

Huafon Microfibre (Shanghai) is not owned by hedge funds. Huafon Group Co., Ltd. is currently the largest shareholder, with 9.1% of shares outstanding. With 6.0% and 4.3% of the shares outstanding respectively, Jinhuan You and Xiaohua You are the second and third largest shareholders. Additionally, the company's CEO Wei Dong Duan directly holds 1.2% of the total shares outstanding.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Huafon Microfibre (Shanghai)

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 insiders maintain a significant holding in Huafon Microfibre (Shanghai) Co., Ltd.. Insiders own CN¥1.5b worth of shares in the CN¥6.5b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 59% stake in Huafon Microfibre (Shanghai), 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 9.1%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Huafon Microfibre (Shanghai) better, we need to consider many other factors. For example, we've discovered 2 warning signs for Huafon Microfibre (Shanghai) that you should be aware of before investing here.

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