Zhejiang HangKe Technology Incorporated Company's (SHSE:688006) top holders are insiders and they are likely disappointed by the recent 3.8% drop

Key Insights

• Zhejiang HangKe Technology's significant insider ownership suggests inherent interests in company's expansion
• 66% of the business is held by the top 2 shareholders
• 12% of Zhejiang HangKe Technology is held by Institutions

To get a sense of who is truly in control of Zhejiang HangKe Technology Incorporated Company (SHSE:688006), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 46% 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.

And following last week's 3.8% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Zhejiang HangKe Technology.

Check out our latest analysis for Zhejiang HangKe Technology

What Does The Institutional Ownership Tell Us About Zhejiang HangKe Technology?

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.

We can see that Zhejiang HangKe Technology does have institutional investors; and they hold a good portion of the company's stock. 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 Zhejiang HangKe Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Zhejiang HangKe Technology. Yu Cao is currently the company's largest shareholder with 44% of shares outstanding. Hangzhou Hangke Intelligent Equipment Group Co., Ltd. is the second largest shareholder owning 22% of common stock, and HSBC Jintrust Fund Management Company Limited holds about 4.5% of the company stock. Additionally, the company's CEO Pingguang Yu directly holds 0.6% of the total shares outstanding.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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

Insider Ownership Of Zhejiang HangKe 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.

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.

It seems insiders own a significant proportion of Zhejiang HangKe Technology Incorporated Company. It is very interesting to see that insiders have a meaningful CN¥5.2b stake in this CN¥11b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. 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 19% stake in Zhejiang HangKe Technology. 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

We can see that Private Companies own 22%, of the shares on issue. 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. Case in point: We've spotted 2 warning signs for Zhejiang HangKe Technology you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.