Beijing ConST Instruments Technology Inc. (SZSE:300445) insiders, who hold 53% of the firm would be disappointed by the recent pullback

Key Insights

• Significant insider control over Beijing ConST Instruments Technology implies vested interests in company growth
• A total of 5 investors have a majority stake in the company with 50% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Beijing ConST Instruments Technology Inc. (SZSE:300445), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 53% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 13% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Beijing ConST Instruments Technology.

See our latest analysis for Beijing ConST Instruments Technology

What Does The Institutional Ownership Tell Us About Beijing ConST Instruments 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.

Beijing ConST Instruments Technology 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. 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 Beijing ConST Instruments Technology's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Beijing ConST Instruments Technology. Looking at our data, we can see that the largest shareholder is Wei Li Jiang with 16% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 13% and 9.7%, of the shares outstanding, respectively. Two of the top three shareholders happen to be Chief Executive Officer and Member of the Board of Directors, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.

To make our study more interesting, we found that the top 5 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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Beijing ConST Instruments Technology

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.

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 Beijing ConST Instruments Technology Inc. stock. This gives them a lot of power. That means they own CN¥1.8b worth of shares in the CN¥3.4b company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 37% stake in the company, and hence can't easily be ignored. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.