Guangdong Insight Brand Marketing Group Co.,Ltd.'s (SZSE:300781) market cap dropped CN¥819m last week; Individual investors bore the brunt

Key Insights

• The considerable ownership by individual investors in Guangdong Insight Brand Marketing GroupLtd indicates that they collectively have a greater say in management and business strategy
• 55% of the business is held by the top 4 shareholders
• Insider ownership in Guangdong Insight Brand Marketing GroupLtd is 36%

If you want to know who really controls Guangdong Insight Brand Marketing Group Co.,Ltd. (SZSE:300781), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 40% to be precise, is individual investors. 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 13% price drop, insiders with their 36% also suffered.

In the chart below, we zoom in on the different ownership groups of Guangdong Insight Brand Marketing GroupLtd.

View our latest analysis for Guangdong Insight Brand Marketing GroupLtd

What Does The Institutional Ownership Tell Us About Guangdong Insight Brand Marketing GroupLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Less than 5% of Guangdong Insight Brand Marketing GroupLtd 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 company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. 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 Insight Brand Marketing GroupLtd. Our data shows that Jianchao Wang is the largest shareholder with 18% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 17% and 15%, of the shares outstanding, respectively. Ming Li, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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 Guangdong Insight Brand Marketing GroupLtd

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.

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 most recent data indicates that insiders own a reasonable proportion of Guangdong Insight Brand Marketing Group Co.,Ltd.. Insiders have a CN¥2.0b stake in this CN¥5.5b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Guangdong Insight Brand Marketing GroupLtd. 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.

Private Company Ownership

We can see that Private Companies own 21%, 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. Take risks for example - Guangdong Insight Brand Marketing GroupLtd has 2 warning signs we think you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.