Huaigang Lei Shanghai Ruking Technologies Co., Ltd.'s (SZSE:301525) CEO is the most bullish insider, and their stock value gained 9.1%last week

Key Insights

• Significant insider control over Shanghai Ruking Technologies implies vested interests in company growth
• 50% of the business is held by the top 6 shareholders
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Shanghai Ruking Technologies Co., Ltd. (SZSE:301525) can tell us which group is most powerful. The group holding the most number of shares in the company, around 48% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit CN¥6.0b market cap following a 9.1% gain in the stock.

Let's delve deeper into each type of owner of Shanghai Ruking Technologies, beginning with the chart below.

See our latest analysis for Shanghai Ruking Technologies

What Does The Institutional Ownership Tell Us About Shanghai Ruking Technologies?

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.

As you can see, institutional investors have a fair amount of stake in Shanghai Ruking Technologies. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Shanghai Ruking Technologies, (below). Of course, keep in mind that there are other factors to consider, too.

Shanghai Ruking Technologies is not owned by hedge funds. The company's CEO Huaigang Lei is the largest shareholder with 17% of shares outstanding. In comparison, the second and third largest shareholders hold about 13% and 9.2% of the stock.

We did some more digging and found that 6 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Shanghai Ruking Technologies

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 insiders maintain a significant holding in Shanghai Ruking Technologies Co., Ltd.. Insiders own CN¥2.9b worth of shares in the CN¥6.0b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 41% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shanghai Ruking Technologies. 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 Company Ownership

It seems that Private Companies own 5.5%, of the Shanghai Ruking Technologies stock. 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:

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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Shanghai Ruking Technologies (of which 1 is concerning!) you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.