Individual investors are Huafon Microfibre (Shanghai) Co., Ltd.'s (SZSE:300180) biggest owners and were hit after market cap dropped CN¥1.0b

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
• A total of 25 investors have a majority stake in the company with 41% ownership
• 23% 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. We can see that individual investors own the lion's share in the company with 59% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of individual investors took a hit after last week’s 6.4% price drop, insiders with their 23% also suffered.

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.

As you can see, institutional investors have a fair amount of stake in Huafon Microfibre (Shanghai). 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. 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.

We note that hedge funds don't have a meaningful investment in Huafon Microfibre (Shanghai). The company's largest shareholder is Huafon Group Co., Ltd., with ownership of 9.1%. Jinhuan You is the second largest shareholder owning 6.0% of common stock, and Xiaohua You holds about 4.3% of the company stock. Furthermore, CEO Wei Dong Duan is the owner of 1.2% of the company's shares.

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 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 Huafon Microfibre (Shanghai)

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 insiders own a significant proportion of Huafon Microfibre (Shanghai) Co., Ltd.. Insiders own CN¥3.4b worth of shares in the CN¥15b company. That's quite meaningful. 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 -- including retail investors -- own 59% of Huafon Microfibre (Shanghai). 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's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private 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. 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.