The recent 21% gain must have brightened Top Key Executive Jingfei Zhao's week, China International Development Corporation Limited's (HKG:264) most bullish insider

Key Insights

• Insiders appear to have a vested interest in China International Development's growth, as seen by their sizeable ownership
• Jingfei Zhao owns 61% of the company
• 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 China International Development Corporation Limited (HKG:264), 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 61% 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).

Clearly, insiders benefitted the most after the company's market cap rose by HK$220m last week.

Let's delve deeper into each type of owner of China International Development, beginning with the chart below.

View our latest analysis for China International Development

What Does The Lack Of Institutional Ownership Tell Us About China International Development?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. China International Development's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

We note that hedge funds don't have a meaningful investment in China International Development. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In China International Development's case, its Top Key Executive, Jingfei Zhao, is the largest shareholder, holding 61% of shares outstanding.

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

Insider Ownership Of China International Development

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 China International Development Corporation Limited. This gives them effective control of the company. That means they own HK$773m worth of shares in the HK$1.3b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 39% 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:

It's always worth thinking about the different groups who own shares in a company. But to understand China International Development better, we need to consider many other factors. For instance, we've identified 4 warning signs for China International Development (2 don't sit too well with us) that you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.