Shenzhen Pagoda Industrial (Group) Corporation Limited's (HKG:2411) 9.3% gain last week benefited both individual investors who own 29% as well as insiders

Key Insights

• The considerable ownership by individual investors in Shenzhen Pagoda Industrial (Group) indicates that they collectively have a greater say in management and business strategy
• The top 3 shareholders own 51% of the company
• Insiders own 24% of Shenzhen Pagoda Industrial (Group)

Every investor in Shenzhen Pagoda Industrial (Group) Corporation Limited (HKG:2411) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 29% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While individual investors were the group that reaped the most benefits after last week’s 9.3% price gain, insiders also received a 24% cut.

In the chart below, we zoom in on the different ownership groups of Shenzhen Pagoda Industrial (Group).

Check out our latest analysis for Shenzhen Pagoda Industrial (Group)

What Does The Institutional Ownership Tell Us About Shenzhen Pagoda Industrial (Group)?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Shenzhen Pagoda Industrial (Group). This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Pagoda Industrial (Group)'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 Pagoda Industrial (Group). From our data, we infer that the largest shareholder is Huiyong Yu (who also holds the title of Top Key Executive) with 24% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. In comparison, the second and third largest shareholders hold about 21% and 5.8% of the stock.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Shenzhen Pagoda Industrial (Group)

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

Our information suggests that insiders maintain a significant holding in Shenzhen Pagoda Industrial (Group) Corporation Limited. It has a market capitalization of just HK$5.0b, and insiders have HK$1.2b worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 29% stake in Shenzhen Pagoda Industrial (Group). 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.

Private Company Ownership

It seems that Private Companies own 14%, of the Shenzhen Pagoda Industrial (Group) stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shenzhen Pagoda Industrial (Group) better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.