Key Insights

• Insiders appear to have a vested interest in EMTEK (Shenzhen)'s growth, as seen by their sizeable ownership
• 52% of the business is held by the top 4 shareholders
• Institutions own 19% of EMTEK (Shenzhen)

To get a sense of who is truly in control of EMTEK (Shenzhen) Co., Ltd. (SZSE:300938), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 52% ownership. 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 CN¥410m last week.

Let's take a closer look to see what the different types of shareholders can tell us about EMTEK (Shenzhen).

What Does The Institutional Ownership Tell Us About EMTEK (Shenzhen)?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

EMTEK (Shenzhen) already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of EMTEK (Shenzhen), (below). Of course, keep in mind that there are other factors to consider, too.

EMTEK (Shenzhen) is not owned by hedge funds. Jie Zhong Lv is currently the largest shareholder, with 31% of shares outstanding. For context, the second largest shareholder holds about 14% of the shares outstanding, followed by an ownership of 3.4% by the third-largest shareholder. In addition, we found that Jianjun Wang, the CEO has 1.7% of the shares allocated to their name.

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

Insider Ownership Of EMTEK (Shenzhen)

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.

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.

It seems that insiders own more than half the EMTEK (Shenzhen) Co., Ltd. stock. This gives them a lot of power. So they have a CN¥1.9b stake in this CN¥3.7b business. 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

The general public-- including retail investors -- own 26% stake in the company, and hence can't easily be ignored. 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

It seems that Private Companies own 3.3%, of the EMTEK (Shenzhen) 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:

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 1 warning sign with EMTEK (Shenzhen) , 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.