Avary Holding(Shenzhen)Co., Limited's (SZSE:002938) largest shareholders are public companies who were rewarded as market cap surged CN¥5.6b last week

Key Insights

• The considerable ownership by public companies in Avary Holding(Shenzhen)Co indicates that they collectively have a greater say in management and business strategy
• 72% of the company is held by a single shareholder (Zhen Ding Technology Holding Limited)
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Avary Holding(Shenzhen)Co., Limited (SZSE:002938), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 72% to be precise, is public companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, public companies were the biggest beneficiaries of last week’s 7.8% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Avary Holding(Shenzhen)Co.

See our latest analysis for Avary Holding(Shenzhen)Co

What Does The Institutional Ownership Tell Us About Avary Holding(Shenzhen)Co?

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.

Avary Holding(Shenzhen)Co already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Avary Holding(Shenzhen)Co, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Avary Holding(Shenzhen)Co. Zhen Ding Technology Holding Limited is currently the largest shareholder, with 72% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 1.2% of the shares outstanding, followed by an ownership of 0.9% by the third-largest shareholder.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Avary Holding(Shenzhen)Co

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own less than 1% of Avary Holding(Shenzhen)Co., Limited. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own CN¥6.9m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 17% stake in Avary Holding(Shenzhen)Co. 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.

Public Company Ownership

We can see that public companies hold 72% of the Avary Holding(Shenzhen)Co shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Avary Holding(Shenzhen)Co , and understanding them should be part of your investment process.

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.