Key Insights

• Significant control over Kunshan TopA Intelligent EquipmentLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 7 shareholders own 51% of the company
• 43% of Kunshan TopA Intelligent EquipmentLtd is held by insiders

If you want to know who really controls Kunshan TopA Intelligent Equipment Co.,Ltd (SZSE:300836), then you'll have to look at the makeup of its share registry. With 44% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders, who own 43% shares weren't spared from last week's CN¥369m market cap drop, individual investors as a group suffered the maximum losses

Let's take a closer look to see what the different types of shareholders can tell us about Kunshan TopA Intelligent EquipmentLtd.

What Does The Institutional Ownership Tell Us About Kunshan TopA Intelligent EquipmentLtd?

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 Kunshan TopA Intelligent EquipmentLtd 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. 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 Kunshan TopA Intelligent EquipmentLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Kunshan TopA Intelligent EquipmentLtd. Looking at our data, we can see that the largest shareholder is the CEO Chaopeng Xiao with 25% of shares outstanding. For context, the second largest shareholder holds about 7.2% of the shares outstanding, followed by an ownership of 5.3% by the third-largest shareholder. Interestingly, the second-largest shareholder, Lihua Zhu is also Chief Financial Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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

Insider Ownership Of Kunshan TopA Intelligent EquipmentLtd

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.

It seems insiders own a significant proportion of Kunshan TopA Intelligent Equipment Co.,Ltd. Insiders own CN¥1.3b worth of shares in the CN¥3.1b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 44% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kunshan TopA Intelligent EquipmentLtd. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Kunshan TopA Intelligent EquipmentLtd has 3 warning signs (and 1 which is a bit unpleasant) we think you should know about.

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.