Key Insights

• Significant control over Guangdong Chj IndustryLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 8 shareholders
• Institutions own 19% of Guangdong Chj IndustryLtd

Every investor in Guangdong Chj Industry Co.,Ltd. (SZSE:002345) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 39% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 7.2% decline in share price, individual investors suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Guangdong Chj IndustryLtd.

What Does The Institutional Ownership Tell Us About Guangdong Chj IndustryLtd?

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.

Guangdong Chj IndustryLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Guangdong Chj IndustryLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Guangdong Chj IndustryLtd. Looking at our data, we can see that the largest shareholder is Shantou Hongji tide Investment Co., Ltd. with 29% of shares outstanding. With 8.7% and 4.1% of the shares outstanding respectively, Dongguan Group and National Council for Social Security Fund are the second and third largest shareholders. Additionally, the company's CEO Chuang Bin Liao directly holds 3.0% of the total shares outstanding.

We did some more digging and found that 8 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Guangdong Chj IndustryLtd

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.

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.

We can report that insiders do own shares in Guangdong Chj Industry Co.,Ltd.. It has a market capitalization of just CN¥4.9b, and insiders have CN¥157m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 39% stake in Guangdong Chj IndustryLtd. 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

We can see that Private Companies own 39%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Guangdong Chj IndustryLtd better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Guangdong Chj IndustryLtd you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.