Shoukun Wu Shenzhen King Brother Electronics Technology Co.,Ltd.'s (SZSE:301041) CEO is the most bullish insider, and their stock value gained 12%last week

Key Insights

• Shenzhen King Brother Electronics TechnologyLtd's significant insider ownership suggests inherent interests in company's expansion
• 51% of the business is held by the top 4 shareholders
• Institutional ownership in Shenzhen King Brother Electronics TechnologyLtd is 12%

If you want to know who really controls Shenzhen King Brother Electronics Technology Co.,Ltd. (SZSE:301041), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 48% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit CN¥3.0b market cap following a 12% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Shenzhen King Brother Electronics TechnologyLtd.

See our latest analysis for Shenzhen King Brother Electronics TechnologyLtd

What Does The Institutional Ownership Tell Us About Shenzhen King Brother Electronics TechnologyLtd?

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.

As you can see, institutional investors have a fair amount of stake in Shenzhen King Brother Electronics TechnologyLtd. 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. 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 Shenzhen King Brother Electronics TechnologyLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Shenzhen King Brother Electronics TechnologyLtd. With a 42% stake, CEO Shoukun Wu is the largest shareholder. Wei Zhang is the second largest shareholder owning 5.7% of common stock, and Nanjing Shengquan Hengyuan Investment Co., Ltd. holds about 1.5% of the company stock.

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 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. 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 Shenzhen King Brother Electronics TechnologyLtd

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.

It seems insiders own a significant proportion of Shenzhen King Brother Electronics Technology Co.,Ltd.. Insiders own CN¥1.4b worth of shares in the CN¥3.0b 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 40% stake in Shenzhen King Brother Electronics TechnologyLtd. 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 Shenzhen King Brother Electronics TechnologyLtd better, we need to consider many other factors. Take risks for example - Shenzhen King Brother Electronics TechnologyLtd has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

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.