Recent 12% pullback would hurt Guangdong Xiongsu Technology Group Co., Ltd (SZSE:300599) insiders

Key Insights

• Significant insider control over Guangdong Xiongsu Technology Group implies vested interests in company growth
• A total of 3 investors have a majority stake in the company with 57% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Guangdong Xiongsu Technology Group Co., Ltd (SZSE:300599), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 58% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 12% decline in share price, insiders suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Guangdong Xiongsu Technology Group.

Check out our latest analysis for Guangdong Xiongsu Technology Group

What Does The Institutional Ownership Tell Us About Guangdong Xiongsu Technology 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.

Less than 5% of Guangdong Xiongsu Technology Group is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Hedge funds don't have many shares in Guangdong Xiongsu Technology Group. Jin Xi Huang is currently the company's largest shareholder with 25% of shares outstanding. In comparison, the second and third largest shareholders hold about 17% and 15% of the stock. Interestingly, the bottom two of the top three shareholders also hold the title of Senior Key Executive and Chairman of the Board, respectively, suggesting that these insiders have a personal stake in the company.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 57% stake.

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. 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 Guangdong Xiongsu Technology 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.

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.

Our information suggests that insiders own more than half of Guangdong Xiongsu Technology Group Co., Ltd. This gives them effective control of the company. That means they own CN¥1.4b worth of shares in the CN¥2.3b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 38% stake in Guangdong Xiongsu Technology Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

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 Guangdong Xiongsu Technology Group (including 2 which make us uncomfortable) .

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.