Hithink RoyalFlush Information Network Co., Ltd. (SZSE:300033) CEO Zheng Yi, the company's largest shareholder sees 3.0% reduction in holdings value

Key Insights

• Significant insider control over Hithink RoyalFlush Information Network implies vested interests in company growth
• A total of 3 investors have a majority stake in the company with 57% ownership
• Institutions own 16% of Hithink RoyalFlush Information Network

To get a sense of who is truly in control of Hithink RoyalFlush Information Network Co., Ltd. (SZSE:300033), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 56% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥63b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's take a closer look to see what the different types of shareholders can tell us about Hithink RoyalFlush Information Network.

See our latest analysis for Hithink RoyalFlush Information Network

What Does The Institutional Ownership Tell Us About Hithink RoyalFlush Information Network?

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.

We can see that Hithink RoyalFlush Information Network does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Hithink RoyalFlush Information Network's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Hithink RoyalFlush Information Network. The company's CEO Zheng Yi is the largest shareholder with 36% of shares outstanding. Qiongjiu Ye is the second largest shareholder owning 11% of common stock, and Shanghai Kaishi'ao Information Consulting Center (Limited Partnership) holds about 9.5% of the company stock. Interestingly, the second-largest shareholder, Qiongjiu Ye is also Senior Key Executive, again, pointing towards strong 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 57% stake.

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 Hithink RoyalFlush Information Network

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. 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 own more than half of Hithink RoyalFlush Information Network Co., Ltd.. This gives them effective control of the company. That means insiders have a very meaningful CN¥35b stake in this CN¥63b business. 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 Hithink RoyalFlush Information Network. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 9.5%, of the Hithink RoyalFlush Information Network stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for Hithink RoyalFlush Information Network that you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.