Nanjing Gaoke Company Limited's (SHSE:600064) market cap surged CN¥606m last week, individual investors who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by individual investors in Nanjing Gaoke indicates that they collectively have a greater say in management and business strategy
• A total of 20 investors have a majority stake in the company with 50% ownership
• Institutional ownership in Nanjing Gaoke is 11%

If you want to know who really controls Nanjing Gaoke Company Limited (SHSE:600064), then you'll have to look at the makeup of its share registry. With 49% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, individual investors were the biggest beneficiaries of last week’s 5.0% gain.

In the chart below, we zoom in on the different ownership groups of Nanjing Gaoke.

See our latest analysis for Nanjing Gaoke

What Does The Institutional Ownership Tell Us About Nanjing Gaoke?

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.

As you can see, institutional investors have a fair amount of stake in Nanjing Gaoke. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Nanjing Gaoke's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Nanjing Gaoke. Looking at our data, we can see that the largest shareholder is Nanjing Xingang Development Corporation with 35% of shares outstanding. With 2.7% and 2.5% of the shares outstanding respectively, Central Huijin Asset Management Ltd. and Nanjing Communications Construction & Investment Holdings(Group)Company Limited are the second and third largest shareholders.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 20 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Nanjing Gaoke

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.

Our data suggests that insiders own under 1% of Nanjing Gaoke Company Limited in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Keep in mind that it's a big company, and the insiders own CN¥115m worth of shares. The absolute value might be more important than the proportional share. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 49% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 38%, of the company's shares. 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 Nanjing Gaoke better, we need to consider many other factors. Be aware that Nanjing Gaoke is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

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.