Individual investors among Amoy Diagnostics Co., Ltd.'s (SZSE:300685) largest shareholders, saw gain in holdings value after stock jumped 6.5% last week

Key Insights

• Significant control over Amoy Diagnostics by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 11 investors have a majority stake in the company with 50% ownership
• Institutions own 20% of Amoy Diagnostics

To get a sense of who is truly in control of Amoy Diagnostics Co., Ltd. (SZSE:300685), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 41% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, individual investors benefitted the most after the company's market cap rose by CN¥446m last week.

In the chart below, we zoom in on the different ownership groups of Amoy Diagnostics.

Check out our latest analysis for Amoy Diagnostics

What Does The Institutional Ownership Tell Us About Amoy Diagnostics?

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.

Amoy Diagnostics already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Amoy Diagnostics, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Amoy Diagnostics. Qianzhan Investment (Hong Kong) Co., Ltd. is currently the largest shareholder, with 22% of shares outstanding. National Council for Social Security Fund is the second largest shareholder owning 6.3% of common stock, and Xiamen Yixiang Investment Partnership Enterprise (Limited Partnership) holds about 5.1% of the company stock.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 11 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Amoy Diagnostics

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 data suggests that insiders own under 1% of Amoy Diagnostics Co., Ltd. in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around CN¥14m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 41% stake in Amoy Diagnostics. 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

Our data indicates that Private Companies hold 32%, of the company's shares. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 1 warning sign for Amoy Diagnostics that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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