Huitong Construction Group Co.,Ltd.'s (SHSE:603176) market cap increased by CN¥226m, insiders receive a 65% cut

Key Insights

• Significant insider control over Huitong Construction GroupLtd implies vested interests in company growth
• 56% of the business is held by the top 3 shareholders
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Huitong Construction Group Co.,Ltd. (SHSE:603176) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 65% 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 a result, insiders were the biggest beneficiaries of last week’s 11% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Huitong Construction GroupLtd.

View our latest analysis for Huitong Construction GroupLtd

What Does The Lack Of Institutional Ownership Tell Us About Huitong Construction GroupLtd?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at 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. Huitong Construction GroupLtd's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Huitong Construction GroupLtd is not owned by hedge funds. Zhongqiang Zhang is currently the largest shareholder, with 26% of shares outstanding. With 23% and 6.9% of the shares outstanding respectively, Zhongshan Zhang and Jiwen Zhang are the second and third largest shareholders. Jiwen Zhang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

After doing some more digging, we found that the top 3 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Huitong Construction GroupLtd

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 the majority of Huitong Construction Group Co.,Ltd.. This means they can collectively make decisions for the company. So they have a CN¥1.5b stake in this CN¥2.3b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Huitong Construction GroupLtd. 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.

Private Company Ownership

It seems that Private Companies own 9.9%, of the Huitong Construction GroupLtd stock. 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.

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. Take risks for example - Huitong Construction GroupLtd has 3 warning signs (and 2 which are a bit unpleasant) we think you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.