The recent 9.6% gain must have brightened Senior Key Executive Zeming Zhao's week, Hiecise Precision Equipment Co.,Ltd.'s (SZSE:300809) most bullish insider

Key Insights

• Insiders appear to have a vested interest in Hiecise Precision EquipmentLtd's growth, as seen by their sizeable ownership
• 58% of the business is held by the top 3 shareholders
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Hiecise Precision Equipment Co.,Ltd. (SZSE:300809), it is important to understand the ownership structure of the business. With 64% 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 scored the highest last week as the company hit CN¥5.4b market cap following a 9.6% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Hiecise Precision EquipmentLtd.

View our latest analysis for Hiecise Precision EquipmentLtd

What Does The Institutional Ownership Tell Us About Hiecise Precision EquipmentLtd?

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.

We can see that Hiecise Precision EquipmentLtd 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 Hiecise Precision EquipmentLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Hiecise Precision EquipmentLtd. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Hiecise Precision EquipmentLtd's case, its Senior Key Executive, Zeming Zhao, is the largest shareholder, holding 23% of shares outstanding. For context, the second largest shareholder holds about 18% of the shares outstanding, followed by an ownership of 18% by the third-largest shareholder. Interestingly, the second and third-largest shareholders also happen to be the Senior Key Executive and Chairman of the Board, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 58% stake.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Hiecise Precision EquipmentLtd

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.

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 Hiecise Precision Equipment Co.,Ltd.. This means they can collectively make decisions for the company. So they have a CN¥3.4b stake in this CN¥5.4b business. Most would argue this is a positive, showing strong alignment with shareholders. 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 22% stake in Hiecise Precision EquipmentLtd. 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 5.1%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the 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. Be aware that Hiecise Precision EquipmentLtd is showing 1 warning sign in our investment analysis , you should know about...

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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