Insiders the biggest winners as Zhejiang Hongxin Technology Co., Ltd.'s (SZSE:301539) market cap rises to CN¥3.1b

Key Insights

• Zhejiang Hongxin Technology's significant insider ownership suggests inherent interests in company's expansion
• A total of 3 investors have a majority stake in the company with 56% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Zhejiang Hongxin Technology Co., Ltd. (SZSE:301539) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 57% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit CN¥3.1b market cap following a 24% gain in the stock.

Let's delve deeper into each type of owner of Zhejiang Hongxin Technology, beginning with the chart below.

Check out our latest analysis for Zhejiang Hongxin Technology

What Does The Lack Of Institutional Ownership Tell Us About Zhejiang Hongxin Technology?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Zhejiang Hongxin Technology might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

We note that hedge funds don't have a meaningful investment in Zhejiang Hongxin Technology. Our data shows that Wenzhi Wang is the largest shareholder with 36% of shares outstanding. With 10% and 9.5% of the shares outstanding respectively, Qiang Bai and Taizhou Jiesheng Investment Partnership Enterprise (Limited Partnership) are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 56% stake.

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. 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 Zhejiang Hongxin Technology

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

It seems that insiders own more than half the Zhejiang Hongxin Technology Co., Ltd. stock. This gives them a lot of power. Given it has a market cap of CN¥3.1b, that means they have CN¥1.8b worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zhejiang Hongxin 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 Company Ownership

We can see that Private Companies own 18%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 2 warning signs for Zhejiang Hongxin Technology (1 shouldn't be ignored!) that you should be aware of before investing here.

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.