Guanghui Zheng Shandong Golden Empire Precision Machinery Technology Co., Ltd.'s (SHSE:603270) CEO is the most bullish insider, and their stock value gained 13%last week

Simply Wall St · 4d ago

Key Insights

  • Shandong Golden Empire Precision Machinery Technology's significant insider ownership suggests inherent interests in company's expansion
  • A total of 2 investors have a majority stake in the company with 61% ownership
  • Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

If you want to know who really controls Shandong Golden Empire Precision Machinery Technology Co., Ltd. (SHSE:603270), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 46% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit CN¥4.0b market cap following a 13% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Shandong Golden Empire Precision Machinery Technology.

Check out our latest analysis for Shandong Golden Empire Precision Machinery Technology

ownership-breakdown
SHSE:603270 Ownership Breakdown September 29th 2024

What Does The Institutional Ownership Tell Us About Shandong Golden Empire Precision Machinery Technology?

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.

Institutions have a very small stake in Shandong Golden Empire Precision Machinery Technology. 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. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

earnings-and-revenue-growth
SHSE:603270 Earnings and Revenue Growth September 29th 2024

Shandong Golden Empire Precision Machinery Technology is not owned by hedge funds. With a 46% stake, CEO Guanghui Zheng is the largest shareholder. In comparison, the second and third largest shareholders hold about 15% and 5.8% of the stock.

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.

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 Shandong Golden Empire Precision Machinery Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 most recent data indicates that insiders own a reasonable proportion of Shandong Golden Empire Precision Machinery Technology Co., Ltd.. Insiders own CN¥1.8b worth of shares in the CN¥4.0b company. 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, who are usually individual investors, hold a 21% stake in Shandong Golden Empire Precision Machinery Technology. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Equity Ownership

With an ownership of 15%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

Our data indicates that Private Companies hold 9.2%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Public Company Ownership

Public companies currently own 3.4% of Shandong Golden Empire Precision Machinery Technology stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shandong Golden Empire Precision Machinery Technology better, we need to consider many other factors. Be aware that Shandong Golden Empire Precision Machinery Technology is showing 1 warning sign in our investment analysis , you should know about...

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.