Key Insights

• Sanhe Tongfei Refrigeration's significant insider ownership suggests inherent interests in company's expansion
• 63% of the business is held by the top 2 shareholders
• Institutions own 14% of Sanhe Tongfei Refrigeration

A look at the shareholders of Sanhe Tongfei Refrigeration Co., Ltd. (SZSE:300990) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 73% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit CN¥6.9b market cap following a 6.0% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Sanhe Tongfei Refrigeration.

What Does The Institutional Ownership Tell Us About Sanhe Tongfei Refrigeration?

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.

As you can see, institutional investors have a fair amount of stake in Sanhe Tongfei Refrigeration. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Sanhe Tongfei Refrigeration'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 Sanhe Tongfei Refrigeration. Our data shows that Guoshan Zhang is the largest shareholder with 33% of shares outstanding. Haolei Zhang is the second largest shareholder owning 30% of common stock, and Li Li holds about 6.3% of the company stock. Two of the top three shareholders happen to be Chief Executive Officer and Member of the Board of Directors, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Sanhe Tongfei Refrigeration

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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.

It seems that insiders own more than half the Sanhe Tongfei Refrigeration Co., Ltd. stock. This gives them a lot of power. So they have a CN¥5.0b stake in this CN¥6.9b business. Most would argue this is a positive, showing strong alignment with shareholders. 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 11% stake in Sanhe Tongfei Refrigeration. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that Sanhe Tongfei Refrigeration is showing 3 warning signs in our investment analysis , and 2 of those don't sit too well with us...

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.