Insiders were the biggest winners as Chang Lan Technology Group Co., Ltd.'s (SZSE:002879) market cap grew by CN¥307m last week

Key Insights

• Insiders appear to have a vested interest in Chang Lan Technology Group's growth, as seen by their sizeable ownership
• 51% of the business is held by the top 5 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Chang Lan Technology Group Co., Ltd. (SZSE:002879) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 46% ownership. 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.

In the chart below, we zoom in on the different ownership groups of Chang Lan Technology Group.

Check out our latest analysis for Chang Lan Technology Group

What Does The Institutional Ownership Tell Us About Chang Lan Technology Group?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Chang Lan Technology Group 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 Chang Lan Technology Group's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Chang Lan Technology Group. Our data shows that Zheng Yuan Yu is the largest shareholder with 37% of shares outstanding. For context, the second largest shareholder holds about 7.3% of the shares outstanding, followed by an ownership of 2.7% by the third-largest shareholder. Furthermore, CEO Shi Lin Xie is the owner of 0.7% of the company's shares.

On looking further, we found that 51% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Chang Lan Technology Group

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 information suggests that insiders maintain a significant holding in Chang Lan Technology Group Co., Ltd.. Insiders own CN¥1.4b worth of shares in the CN¥3.1b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 42% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Chang Lan Technology Group better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Chang Lan Technology Group (of which 1 is a bit concerning!) 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.