Is Shanghai Kindly Medical Instruments Co., Ltd. (HKG:1501) Popular Amongst Insiders?

If you want to know who really controls Shanghai Kindly Medical Instruments Co., Ltd. (HKG:1501), then you'll have to look at the makeup of its share registry. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Shanghai Kindly Medical Instruments isn't enormous, but it's not particularly small either. It has a market capitalization of HK$6.9b, which means it would generally expect to see some institutions on the share registry. In the chart below, we can see that institutions own shares in the company. Let's take a closer look to see what the different types of shareholders can tell us about Shanghai Kindly Medical Instruments.

Check out our latest analysis for Shanghai Kindly Medical Instruments

What Does The Institutional Ownership Tell Us About Shanghai Kindly Medical Instruments?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Shanghai Kindly Medical Instruments does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Shanghai Kindly Medical Instruments' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Shanghai Kindly Medical Instruments. Our data shows that Shanghai Kindly Enterprise Development Group Co.,LTD. is the largest shareholder with 26% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 15% and 6.8%, of the shares outstanding, respectively. Additionally, the company's CEO Dongke Liang directly holds 5.7% of the total shares outstanding.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Shanghai Kindly Medical Instruments

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Shanghai Kindly Medical Instruments Co., Ltd.. Insiders have a HK$884m stake in this HK$6.9b business. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 28% ownership, the general public have some degree of sway over Shanghai Kindly Medical Instruments. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 6.8%, private equity firms could influence the Shanghai Kindly Medical Instruments 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.

Public Company Ownership

We can see that public companies hold 26% of the Shanghai Kindly Medical Instruments shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shanghai Kindly Medical Instruments better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Shanghai Kindly Medical Instruments you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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. 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.
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