Key Insights

• Kingfa Sci. & Tech's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 41% of the business is held by the top 25 shareholders
• Insiders own 33% of Kingfa Sci. & Tech

If you want to know who really controls Kingfa Sci. & Tech. Co., Ltd. (SHSE:600143), then you'll have to look at the makeup of its share registry. With 58% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And individual insiders on the other hand have a 33% ownership in the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.

In the chart below, we zoom in on the different ownership groups of Kingfa Sci. & Tech.

What Does The Institutional Ownership Tell Us About Kingfa Sci. & Tech?

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 Kingfa Sci. & Tech. 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 Kingfa Sci. & Tech's historic earnings and revenue below, but keep in mind there's always more to the story.

Kingfa Sci. & Tech is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Zhimin Yuan with 19% of shares outstanding. Haitao Xiong is the second largest shareholder owning 4.6% of common stock, and Nan Jing Li holds about 3.5% of the company stock. Nan Jing Li, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

Our studies suggest that the top 25 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.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Kingfa Sci. & Tech

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 a reasonable proportion of Kingfa Sci. & Tech. Co., Ltd.. Insiders own CN¥5.8b worth of shares in the CN¥18b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public -- including retail investors -- own 58% of Kingfa Sci. & Tech. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Kingfa Sci. & Tech better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Kingfa Sci. & Tech you should be aware of, and 2 of them can't be ignored.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.