Wenfeng Cui SMARTGEN (Zhengzhou) Technology Co., Ltd.'s (SZSE:301361) CEO is the most bullish insider, and their stock value gained 11%last week

Key Insights

• SMARTGEN (Zhengzhou) Technology's significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 64% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in SMARTGEN (Zhengzhou) Technology Co., Ltd. (SZSE:301361) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 73% 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¥3.7b market cap following a 11% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about SMARTGEN (Zhengzhou) Technology.

See our latest analysis for SMARTGEN (Zhengzhou) Technology

What Does The Institutional Ownership Tell Us About SMARTGEN (Zhengzhou) 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.

Institutions have a very small stake in SMARTGEN (Zhengzhou) Technology. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

We note that hedge funds don't have a meaningful investment in SMARTGEN (Zhengzhou) Technology. Looking at our data, we can see that the largest shareholder is the CEO Wenfeng Cui with 36% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 28% and 8.6%, of the shares outstanding, respectively. Interestingly, the third-largest shareholder, Lu Yang is also a Member of the Board of Directors, again, indicating strong 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.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of SMARTGEN (Zhengzhou) Technology

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.

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.

It seems that insiders own more than half the SMARTGEN (Zhengzhou) Technology Co., Ltd. stock. This gives them a lot of power. That means they own CN¥2.7b worth of shares in the CN¥3.7b 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 22% stake in the company, and hence can't easily be ignored. 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.

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.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.