Key Insights

• Significant insider control over Sanhe Tongfei Refrigeration implies vested interests in company growth
• 63% of the business is held by the top 2 shareholders
• Institutions own 15% 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. The group holding the most number of shares in the company, around 73% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to CN¥7.7b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Sanhe Tongfei Refrigeration.

Check out our latest analysis for Sanhe Tongfei Refrigeration

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

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.

We can see that Sanhe Tongfei Refrigeration does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Sanhe Tongfei Refrigeration's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Sanhe Tongfei Refrigeration. Looking at our data, we can see that the largest shareholder is Guoshan Zhang with 33% of shares outstanding. For context, the second largest shareholder holds about 30% of the shares outstanding, followed by an ownership of 6.3% by the third-largest shareholder. Note that the second and third-largest shareholders are also Chief Executive Officer and Member of the Board of Directors, respectively, meaning that the company's top shareholders are insiders.

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

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own the majority of Sanhe Tongfei Refrigeration Co., Ltd.. This means they can collectively make decisions for the company. Insiders own CN¥5.6b worth of shares in the CN¥7.7b company. That's extraordinary! It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 10% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sanhe Tongfei Refrigeration. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sanhe Tongfei Refrigeration better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Sanhe Tongfei Refrigeration (of which 2 shouldn't be ignored!) you should know about.

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.