Key Insights

• Significant insider control over Henan Thinker Automatic EquipmentLtd implies vested interests in company growth
• 57% of the business is held by the top 4 shareholders
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of Henan Thinker Automatic Equipment Co.,Ltd. (SHSE:603508) can tell us which group is most powerful. With 58% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As market cap fell to CN¥8.9b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's take a closer look to see what the different types of shareholders can tell us about Henan Thinker Automatic EquipmentLtd.

What Does The Institutional Ownership Tell Us About Henan Thinker Automatic EquipmentLtd?

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.

Henan Thinker Automatic EquipmentLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Henan Thinker Automatic EquipmentLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Henan Thinker Automatic EquipmentLtd is not owned by hedge funds. Jie Guo is currently the company's largest shareholder with 20% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 11% of the stock. Jianzhou Zhao, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

On looking further, we found that 57% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Henan Thinker Automatic EquipmentLtd

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.

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.

Our information suggests that insiders own more than half of Henan Thinker Automatic Equipment Co.,Ltd.. This gives them effective control of the company. Insiders own CN¥5.1b worth of shares in the CN¥8.9b company. That's extraordinary! Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public-- including retail investors -- own 29% stake in the company, and hence can't easily be ignored. 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.

Public Company Ownership

It appears to us that public companies own 4.6% of Henan Thinker Automatic EquipmentLtd. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Henan Thinker Automatic EquipmentLtd better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Henan Thinker Automatic EquipmentLtd , and understanding them should be part of your investment process.

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.