Guangdong Join-Share Financing Guarantee Investment Co., Ltd.'s (HKG:1543) market cap up HK$140m last week, benefiting both retail investors who own 54% as well as insiders

Key Insights

• Guangdong Join-Share Financing Guarantee Investment's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 11 investors have a majority stake in the company with 46% ownership
• Insiders have been buying lately

To get a sense of who is truly in control of Guangdong Join-Share Financing Guarantee Investment Co., Ltd. (HKG:1543), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 54% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 15% increase in the stock price last week, retail investors profited the most, but insiders who own 16% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of Guangdong Join-Share Financing Guarantee Investment.

See our latest analysis for Guangdong Join-Share Financing Guarantee Investment

What Does The Lack Of Institutional Ownership Tell Us About Guangdong Join-Share Financing Guarantee Investment?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

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. Guangdong Join-Share Financing Guarantee Investment might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Hedge funds don't have many shares in Guangdong Join-Share Financing Guarantee Investment. Foshan Financial Investment Holdings Co.,Ltd is currently the largest shareholder, with 15% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 7.2%, of the shares outstanding, respectively. Additionally, the company's CEO Liejin Wu directly holds 2.1% of the total shares outstanding.

Our studies suggest that the top 11 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. 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 Guangdong Join-Share Financing Guarantee Investment

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. 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 maintain a significant holding in Guangdong Join-Share Financing Guarantee Investment Co., Ltd.. It has a market capitalization of just HK$1.1b, and insiders have HK$176m worth of shares in their own names. 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, mostly comprising of individual investors, collectively holds 54% of Guangdong Join-Share Financing Guarantee Investment shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Equity Ownership

With a stake of 15%, private equity firms could influence the Guangdong Join-Share Financing Guarantee Investment board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

It seems that Private Companies own 15%, of the Guangdong Join-Share Financing Guarantee Investment stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Guangdong Join-Share Financing Guarantee Investment (at least 1 which is concerning) , and understanding them should be part of your investment process.

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.

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