Key Insights

• Guangzhou Fangbang ElectronicsLtd's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 51% of the business is held by the top 4 shareholders
• Insider ownership in Guangzhou Fangbang ElectronicsLtd is 28%

A look at the shareholders of Guangzhou Fangbang Electronics Co.,Ltd (SHSE:688020) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 31% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders, who own 28% shares weren't spared from last week's CN¥459m market cap drop, individual investors as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of Guangzhou Fangbang ElectronicsLtd.

What Does The Institutional Ownership Tell Us About Guangzhou Fangbang ElectronicsLtd?

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.

Guangzhou Fangbang ElectronicsLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Guangzhou Fangbang ElectronicsLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Guangzhou Fangbang ElectronicsLtd. Yunlian Hu is currently the largest shareholder, with 18% of shares outstanding. Guangzhou Lijia Electronics Co., Ltd. is the second largest shareholder owning 18% of common stock, and Guangzhou Meizhi Electronics Limited Partnership Enterprise(Limited Partnership) holds about 9.0% of the company stock.

On looking further, we found that 51% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Guangzhou Fangbang ElectronicsLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own a reasonable proportion of Guangzhou Fangbang Electronics Co.,Ltd. It has a market capitalization of just CN¥2.4b, and insiders have CN¥675m 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, who are usually individual investors, hold a 31% stake in Guangzhou Fangbang ElectronicsLtd. 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.

Private Company Ownership

It seems that Private Companies own 27%, of the Guangzhou Fangbang ElectronicsLtd 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Guangzhou Fangbang ElectronicsLtd better, we need to consider many other factors. Be aware that Guangzhou Fangbang ElectronicsLtd is showing 1 warning sign in our investment analysis , 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. 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.