Key Insights

• NanJing GOVA Technology's significant insider ownership suggests inherent interests in company's expansion
• 55% of the business is held by the top 4 shareholders
• 15% of NanJing GOVA Technology is held by Institutions

To get a sense of who is truly in control of NanJing GOVA Technology Co., Ltd. (SHSE:688539), it is important to understand the ownership structure of the business. With 58% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit CN¥4.0b market cap following a 11% gain in the stock.

In the chart below, we zoom in on the different ownership groups of NanJing GOVA Technology.

What Does The Institutional Ownership Tell Us About NanJing GOVA Technology?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in NanJing GOVA Technology. 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. 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 NanJing GOVA Technology, (below). Of course, keep in mind that there are other factors to consider, too.

NanJing GOVA Technology is not owned by hedge funds. Weiping Li is currently the largest shareholder, with 18% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 12% of the stock. Biao Huang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

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.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of NanJing GOVA Technology

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.

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.

Our most recent data indicates that insiders own the majority of NanJing GOVA Technology Co., Ltd.. This means they can collectively make decisions for the company. Given it has a market cap of CN¥4.0b, that means they have CN¥2.4b worth of shares. 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 25% stake in NanJing GOVA Technology. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand NanJing GOVA Technology better, we need to consider many other factors. Be aware that NanJing GOVA Technology is showing 2 warning signs in our investment analysis , and 1 of those is significant...

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.