Insiders of China Qinfa Group Limited (HKG:866) were rewarded after last week’s 10% gain

Key Insights

• Insiders appear to have a vested interest in China Qinfa Group's growth, as seen by their sizeable ownership
• 64% of the company is held by a single shareholder (Jihua Xu)
• Insiders have bought recently

If you want to know who really controls China Qinfa Group Limited (HKG:866), 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 71% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

A quick look at our data suggests that insiders have been buying shares in the company recently and their bets paid off last week after the stock gained 10%.

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

View our latest analysis for China Qinfa Group

What Does The Lack Of Institutional Ownership Tell Us About China Qinfa Group?

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 many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of China Qinfa Group, for yourself, below.

China Qinfa Group is not owned by hedge funds. Jihua Xu is currently the company's largest shareholder with 64% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. In comparison, the second and third largest shareholders hold about 4.6% and 3.7% of the stock. Da Xu, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. In addition, we found that Tao Bai, the CEO has 2.0% of the shares allocated to their name.

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. 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 China Qinfa Group

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own the majority of China Qinfa Group Limited. This means they can collectively make decisions for the company. That means they own HK$2.5b worth of shares in the HK$3.6b company. That's quite meaningful. 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 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over China Qinfa Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 4.6%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand China Qinfa Group better, we need to consider many other factors. For example, we've discovered 2 warning signs for China Qinfa Group that you should be aware of before investing here.

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.