Following recent decline, Guangdong AVCiT Technology Holding Co., Ltd.'s (SZSE:001229) top shareholder CEO Hua Fang sees holdings value drop by 10%

Key Insights

• Significant insider control over Guangdong AVCiT Technology Holding implies vested interests in company growth
• 53% of the business is held by the top 2 shareholders
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Guangdong AVCiT Technology Holding Co., Ltd. (SZSE:001229), 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 63% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to CN¥2.5b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Guangdong AVCiT Technology Holding, beginning with the chart below.

See our latest analysis for Guangdong AVCiT Technology Holding

What Does The Institutional Ownership Tell Us About Guangdong AVCiT Technology Holding?

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.

Guangdong AVCiT Technology Holding 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Guangdong AVCiT Technology Holding's historic earnings and revenue below, but keep in mind there's always more to the story.

Guangdong AVCiT Technology Holding is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Hua Fang with 34% of shares outstanding. With 20% and 9.8% of the shares outstanding respectively, Weifei Ye and Qingwen Zeng are the second and third largest shareholders. Interestingly, the second and third-largest shareholders also happen to be the Senior Key Executive and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Guangdong AVCiT Technology Holding

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.

It seems that insiders own more than half the Guangdong AVCiT Technology Holding Co., Ltd. stock. This gives them a lot of power. So they have a CN¥1.6b stake in this CN¥2.5b 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

The general public, who are usually individual investors, hold a 23% stake in Guangdong AVCiT Technology Holding. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 7.5%, of the shares on issue. 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 Guangdong AVCiT Technology Holding better, we need to consider many other factors. For instance, we've identified 1 warning sign for Guangdong AVCiT Technology Holding that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.