Recent 9.4% pullback would hurt NanJing GOVA Technology Co., Ltd. (SHSE:688539) insiders

Key Insights

• Significant insider control over NanJing GOVA Technology implies vested interests in company growth
• A total of 4 investors have a majority stake in the company with 55% ownership
• Institutional ownership in NanJing GOVA Technology is 15%

To get a sense of who is truly in control of NanJing GOVA Technology Co., Ltd. (SHSE:688539), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 58% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 9.4% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of NanJing GOVA Technology, beginning with the chart below.

See our latest analysis for NanJing GOVA Technology

What Does The Institutional Ownership Tell Us About NanJing GOVA Technology?

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.

NanJing GOVA Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 GOVA Technology's earnings history below. Of course, the future is what really matters.

NanJing GOVA Technology is not owned by hedge funds. The company's largest shareholder is Weiping Li, with ownership of 18%. For context, the second largest shareholder holds about 14% of the shares outstanding, followed by an ownership of 12% by the third-largest shareholder. Dequn She, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

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 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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of NanJing GOVA Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 the majority of NanJing GOVA Technology Co., Ltd.. This means they can collectively make decisions for the company. So they have a CN¥2.3b stake in this CN¥4.0b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over NanJing GOVA Technology. 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 NanJing GOVA Technology better, we need to consider many other factors. For instance, we've identified 2 warning signs for NanJing GOVA Technology (1 is significant) 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.