Insiders were the key beneficiaries as Shenzhen Kinwong Electronic Co., Ltd.'s (SHSE:603228) market cap rises to CN¥27b

Key Insights

• Significant insider control over Shenzhen Kinwong Electronic implies vested interests in company growth
• The top 2 shareholders own 70% of the company
• Institutional ownership in Shenzhen Kinwong Electronic is 13%

If you want to know who really controls Shenzhen Kinwong Electronic Co., Ltd. (SHSE:603228), 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 70% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit CN¥27b market cap following a 11% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Shenzhen Kinwong Electronic.

View our latest analysis for Shenzhen Kinwong Electronic

What Does The Institutional Ownership Tell Us About Shenzhen Kinwong Electronic?

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 Shenzhen Kinwong Electronic. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Shenzhen Kinwong Electronic, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Shenzhen Kinwong Electronic. Looking at our data, we can see that the largest shareholder is Xiao Fen Huang with 35% of shares outstanding. With 35% and 4.6% of the shares outstanding respectively, Jun Zhuo and Zhong Ou Fund Management Co., Ltd are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 70% stake.

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

Insider Ownership Of Shenzhen Kinwong Electronic

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.

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.

It seems that insiders own more than half the Shenzhen Kinwong Electronic Co., Ltd. stock. This gives them a lot of power. That means insiders have a very meaningful CN¥19b stake in this CN¥27b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public-- including retail investors -- own 14% 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

It seems that Private Companies own 3.2%, of the Shenzhen Kinwong Electronic stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shenzhen Kinwong Electronic better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Shenzhen Kinwong Electronic .

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