After the recent decline, Sangfor Technologies Inc. (SZSE:300454) CEO Chaoxi He's holdings have lost 12% of their value

Key Insights

• Insiders appear to have a vested interest in Sangfor Technologies' growth, as seen by their sizeable ownership
• A total of 5 investors have a majority stake in the company with 51% ownership
• Institutional ownership in Sangfor Technologies is 15%

If you want to know who really controls Sangfor Technologies Inc. (SZSE:300454), 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 46% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

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

Let's delve deeper into each type of owner of Sangfor Technologies, beginning with the chart below.

See our latest analysis for Sangfor Technologies

What Does The Institutional Ownership Tell Us About Sangfor Technologies?

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 Sangfor Technologies. 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 Sangfor Technologies' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Sangfor Technologies. Looking at our data, we can see that the largest shareholder is the CEO Chaoxi He with 20% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 18% and 8.1%, of the shares outstanding, respectively. Note that two of the top three shareholders are also Senior Key Executive and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.

After doing some more digging, we found that the top 5 shareholders control more than half of the company's shares which essentially means that there is concentrated ownership amongst the top shareholders, most of whom happen to be insiders!

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Sangfor Technologies

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own a reasonable proportion of Sangfor Technologies Inc.. Insiders own CN¥10b worth of shares in the CN¥22b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 39% stake in Sangfor Technologies. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Sangfor Technologies better, we need to consider many other factors. For instance, we've identified 2 warning signs for Sangfor Technologies that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.