Nanhua Instruments Co., Ltd.'s (SZSE:300417) market cap up CN¥101m last week, benefiting both retail investors who own 48% as well as insiders

Key Insights

• The considerable ownership by retail investors in Nanhua Instruments indicates that they collectively have a greater say in management and business strategy
• The top 12 shareholders own 50% of the company
• 47% of Nanhua Instruments is held by insiders

If you want to know who really controls Nanhua Instruments Co., Ltd. (SZSE:300417), then you'll have to look at the makeup of its share registry. We can see that retail investors own the lion's share in the company with 48% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While retail investors were the group that benefitted the most from last week’s CN¥101m market cap gain, insiders too had a 47% share in those profits.

Let's take a closer look to see what the different types of shareholders can tell us about Nanhua Instruments.

View our latest analysis for Nanhua Instruments

What Does The Institutional Ownership Tell Us About Nanhua Instruments?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Since institutions own only a small portion of Nanhua Instruments, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in Nanhua Instruments. Our data shows that Yaoguang Yang is the largest shareholder with 12% of shares outstanding. With 12% and 11% of the shares outstanding respectively, Yuan Li and Zhiyi Deng are the second and third largest shareholders. Zhiyi Deng, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

After doing some more digging, we found that the top 12 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over 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 Nanhua Instruments

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our information suggests that insiders maintain a significant holding in Nanhua Instruments Co., Ltd.. Insiders own CN¥505m worth of shares in the CN¥1.1b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 48% stake in Nanhua Instruments. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for Nanhua Instruments that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.