Hefei Meyer Optoelectronic Technology Inc. (SZSE:002690) adds CN¥535m in market cap and insiders have a 69% stake in that gain

Key Insights

• Insiders appear to have a vested interest in Hefei Meyer Optoelectronic Technology's growth, as seen by their sizeable ownership
• The largest shareholder of the company is Ming Tian with a 61% stake
• 14% of Hefei Meyer Optoelectronic Technology is held by Institutions

A look at the shareholders of Hefei Meyer Optoelectronic Technology Inc. (SZSE:002690) can tell us which group is most powerful. With 69% stake, individual insiders possess the maximum shares in the company. 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 3.8% gain.

In the chart below, we zoom in on the different ownership groups of Hefei Meyer Optoelectronic Technology.

View our latest analysis for Hefei Meyer Optoelectronic Technology

What Does The Institutional Ownership Tell Us About Hefei Meyer Optoelectronic 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 Hefei Meyer Optoelectronic Technology does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Hefei Meyer Optoelectronic Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

Hefei Meyer Optoelectronic Technology is not owned by hedge funds. Our data shows that Ming Tian is the largest shareholder with 61% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Xianjin Hao is the second largest shareholder owning 3.5% of common stock, and JP Morgan Asset Management holds about 3.4% of the company stock. Xianjin Hao, who is the second-largest shareholder, also happens to hold the title of Other Key Executive. In addition, we found that Haibin Shen, the CEO has 2.9% of the shares allocated to their name.

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

Insider Ownership Of Hefei Meyer Optoelectronic 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. 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.

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.

Our most recent data indicates that insiders own the majority of Hefei Meyer Optoelectronic Technology Inc.. This means they can collectively make decisions for the company. Insiders own CN¥9.9b worth of shares in the CN¥14b company. That's extraordinary! Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public-- including retail investors -- own 17% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Hefei Meyer Optoelectronic Technology is showing 1 warning sign in our investment analysis , you should know about...

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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