Key Insights

• Insiders appear to have a vested interest in China Qidian Guofeng Holdings' growth, as seen by their sizeable ownership
• A total of 4 investors have a majority stake in the company with 55% ownership
• Insiders have been buying lately

If you want to know who really controls China Qidian Guofeng Holdings Limited (HKG:1280), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 44% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

It's interesting to note that insiders have been buying shares recently. Their expectations, however, were not satisfied, as the market cap dropped to HK$3.8b over the past week.

Let's delve deeper into each type of owner of China Qidian Guofeng Holdings, beginning with the chart below.

What Does The Lack Of Institutional Ownership Tell Us About China Qidian Guofeng Holdings?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. China Qidian Guofeng Holdings' earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

China Qidian Guofeng Holdings is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In China Qidian Guofeng Holdings' case, its Top Key Executive, Li Yuan, is the largest shareholder, holding 18% of shares outstanding. With 17% and 11% of the shares outstanding respectively, Chongqing Saint Information Technology Co., Ltd. and Heimazhidi Co., Ltd. are the second and third largest shareholders.

Our research also brought to light the fact that roughly 55% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of China Qidian Guofeng Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 China Qidian Guofeng Holdings Limited. It has a market capitalization of just HK$3.8b, and insiders have HK$1.7b worth of shares in their own names. We 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

The general public, who are usually individual investors, hold a 19% stake in China Qidian Guofeng Holdings. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 38%, of the shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that China Qidian Guofeng Holdings is showing 3 warning signs in our investment analysis , 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.