Insiders with their considerable ownership were the key benefactors as Hefei Meyer Optoelectronic Technology Inc. (SZSE:002690) touches CN¥11b market cap

Key Insights

• Hefei Meyer Optoelectronic Technology's significant insider ownership suggests inherent interests in company's expansion
• Ming Tian owns 61% of the company
• 13% of Hefei Meyer Optoelectronic Technology is held by Institutions

To get a sense of who is truly in control of Hefei Meyer Optoelectronic Technology Inc. (SZSE:002690), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 69% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥475m last week.

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

See our latest analysis for Hefei Meyer Optoelectronic Technology

What Does The Institutional Ownership Tell Us About Hefei Meyer Optoelectronic Technology?

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.

Hefei Meyer Optoelectronic Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Hefei Meyer Optoelectronic Technology's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Hefei Meyer Optoelectronic Technology. Looking at our data, we can see that the largest shareholder is Ming Tian with 61% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. In comparison, the second and third largest shareholders hold about 3.6% and 3.0% of the stock. Xianjin Hao, who is the second-largest shareholder, also happens to hold the title of Other Key Executive. Additionally, the company's CEO Haibin Shen directly holds 2.9% of the total shares outstanding.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Hefei Meyer Optoelectronic Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 Hefei Meyer Optoelectronic Technology Inc.. This means they can collectively make decisions for the company. Given it has a market cap of CN¥11b, that means insiders have a whopping CN¥7.9b worth of shares in their own names. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 18% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hefei Meyer Optoelectronic 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 1 warning sign for Hefei Meyer Optoelectronic Technology that you should be aware of before investing here.

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.

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

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.