Key Insights

• The considerable ownership by retail investors in Xiamen Comfort Science&Technology Group indicates that they collectively have a greater say in management and business strategy
• 44% of the business is held by the top 25 shareholders
• Insiders own 40% of Xiamen Comfort Science&Technology Group

To get a sense of who is truly in control of Xiamen Comfort Science&Technology Group Co., Ltd (SZSE:002614), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 56% 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¥4.4b last week, while insiders who own 40% also benefitted.

Let's delve deeper into each type of owner of Xiamen Comfort Science&Technology Group, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Xiamen Comfort Science&Technology Group?

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.

Institutions have a very small stake in Xiamen Comfort Science&Technology Group. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. 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.

We note that hedge funds don't have a meaningful investment in Xiamen Comfort Science&Technology Group. With a 20% stake, CEO Jianhan Zou is the largest shareholder. In comparison, the second and third largest shareholders hold about 18% and 1.9% of the stock. Interestingly, the second-largest shareholder, Wu Ling Li is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Xiamen Comfort Science&Technology Group

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.

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 a reasonable proportion of Xiamen Comfort Science&Technology Group Co., Ltd. Insiders have a CN¥1.8b stake in this CN¥4.4b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 56% of Xiamen Comfort Science&Technology Group. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 3 warning signs for Xiamen Comfort Science&Technology Group (1 is significant) that you should be aware of.

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.