Key Insights

• Wenzhou Hongfeng Electrical Alloy's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 48% of the business is held by the top 23 shareholders
• 45% of Wenzhou Hongfeng Electrical Alloy is held by insiders

To get a sense of who is truly in control of Wenzhou Hongfeng Electrical Alloy Co., Ltd. (SZSE:300283), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 52% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Retail investors gained the most after market cap touched CN¥2.5b last week, while insiders who own 45% also benefitted.

Let's delve deeper into each type of owner of Wenzhou Hongfeng Electrical Alloy, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Wenzhou Hongfeng Electrical Alloy?

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.

Since institutions own only a small portion of Wenzhou Hongfeng Electrical Alloy, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in Wenzhou Hongfeng Electrical Alloy. Looking at our data, we can see that the largest shareholder is the CEO Xiao Chen with 40% of shares outstanding. With 3.5% and 1.5% of the shares outstanding respectively, Lin Ping and Jinjie Yu are the second and third largest shareholders.

Our studies suggest that the top 23 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 Wenzhou Hongfeng Electrical Alloy

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders maintain a significant holding in Wenzhou Hongfeng Electrical Alloy Co., Ltd.. It has a market capitalization of just CN¥2.5b, and insiders have CN¥1.1b worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 52% stake in Wenzhou Hongfeng Electrical Alloy, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 3 warning signs we've spotted with Wenzhou Hongfeng Electrical Alloy (including 2 which are a bit unpleasant) .

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.