Key Insights

• Insiders appear to have a vested interest in Shenzhen Fuanna Bedding and FurnishingLtd's growth, as seen by their sizeable ownership
• 54% of the business is held by the top 2 shareholders
• Institutional ownership in Shenzhen Fuanna Bedding and FurnishingLtd is 14%

If you want to know who really controls Shenzhen Fuanna Bedding and Furnishing Co.,Ltd (SZSE:002327), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 55% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 4.6% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Shenzhen Fuanna Bedding and FurnishingLtd.

What Does The Institutional Ownership Tell Us About Shenzhen Fuanna Bedding and FurnishingLtd?

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.

We can see that Shenzhen Fuanna Bedding and FurnishingLtd does have institutional investors; and they hold a good portion of the company's stock. 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 Fuanna Bedding and FurnishingLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Shenzhen Fuanna Bedding and FurnishingLtd is not owned by hedge funds. With a 40% stake, CEO Guofang Lin is the largest shareholder. Guohong Chen is the second largest shareholder owning 15% of common stock, and Zhong Ou Fund Management Co., Ltd holds about 2.5% of the company stock.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 54% stake.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Shenzhen Fuanna Bedding and FurnishingLtd

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.

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 own more than half of Shenzhen Fuanna Bedding and Furnishing Co.,Ltd. This gives them effective control of the company. Insiders own CN¥4.9b worth of shares in the CN¥9.0b company. That's extraordinary! Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public-- including retail investors -- own 32% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shenzhen Fuanna Bedding and FurnishingLtd better, we need to consider many other factors. Take risks for example - Shenzhen Fuanna Bedding and FurnishingLtd has 1 warning sign we think you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.