The recent 5.7% gain must have brightened CEO Changmao Tang's week, Shenzhen Edadoc Technology Co.,Ltd.'s (SZSE:301366) most bullish insider

Key Insights

• Insiders appear to have a vested interest in Shenzhen Edadoc TechnologyLtd's growth, as seen by their sizeable ownership
• 54% of the business is held by the top 6 shareholders
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Shenzhen Edadoc Technology Co.,Ltd. (SZSE:301366), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 59% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥377m last week.

Let's delve deeper into each type of owner of Shenzhen Edadoc TechnologyLtd, beginning with the chart below.

Check out our latest analysis for Shenzhen Edadoc TechnologyLtd

What Does The Institutional Ownership Tell Us About Shenzhen Edadoc TechnologyLtd?

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.

Shenzhen Edadoc TechnologyLtd 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 Shenzhen Edadoc TechnologyLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Shenzhen Edadoc TechnologyLtd. With a 14% stake, CEO Changmao Tang is the largest shareholder. The second and third largest shareholders are Hansheng Ke and Canzhong Wang, with an equal amount of shares to their name at 9.5%.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Shenzhen Edadoc TechnologyLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 information suggests that insiders own more than half of Shenzhen Edadoc Technology Co.,Ltd.. This gives them effective control of the company. So they have a CN¥4.2b stake in this CN¥7.0b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 28% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shenzhen Edadoc 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.

Private Equity Ownership

With an ownership of 6.4%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

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. Take risks for example - Shenzhen Edadoc TechnologyLtd has 4 warning signs (and 3 which don't sit too well with us) we think you should know about.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.