Retail investors are Guangdong Hongtu Technology (holdings) Co.,Ltd.'s (SZSE:002101) biggest owners and were rewarded after market cap rose by CN¥385m last week

Key Insights

• Significant control over Guangdong Hongtu Technology (holdings)Ltd by retail investors implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 5 shareholders
• Institutional ownership in Guangdong Hongtu Technology (holdings)Ltd is 13%

If you want to know who really controls Guangdong Hongtu Technology (holdings) Co.,Ltd. (SZSE:002101), then you'll have to look at the makeup of its share registry. We can see that retail investors own the lion's share in the company with 41% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, retail investors benefitted the most after the company's market cap rose by CN¥385m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Guangdong Hongtu Technology (holdings)Ltd.

View our latest analysis for Guangdong Hongtu Technology (holdings)Ltd

What Does The Institutional Ownership Tell Us About Guangdong Hongtu Technology (holdings)Ltd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Guangdong Hongtu Technology (holdings)Ltd 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 Guangdong Hongtu Technology (holdings)Ltd's historic earnings and revenue below, but keep in mind there's always more to the story.

Guangdong Hongtu Technology (holdings)Ltd is not owned by hedge funds. Guangdong Technology Venture Capital Co., Ltd. is currently the largest shareholder, with 22% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.4% and 7.4% of the stock.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Guangdong Hongtu Technology (holdings)Ltd

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. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that Guangdong Hongtu Technology (holdings) Co.,Ltd. insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It appears that the board holds about CN¥7.9m worth of stock. This compares to a market capitalization of CN¥6.8b. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 41% stake in the company, and hence can't easily be ignored. 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 a stake of 22%, private equity firms could influence the Guangdong Hongtu Technology (holdings)Ltd board. 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 23%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Guangdong Hongtu Technology (holdings)Ltd , and understanding them should be part of your investment process.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com