The recent 4.4% gain must have brightened CEO Zheng Yi's week, Hithink RoyalFlush Information Network Co., Ltd.'s (SZSE:300033) most bullish insider

Key Insights

• Insiders appear to have a vested interest in Hithink RoyalFlush Information Network's growth, as seen by their sizeable ownership
• The top 3 shareholders own 57% of the company
• Institutions own 12% 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. And the group that holds the biggest piece of the pie are individual insiders with 56% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders were the biggest beneficiaries of last week’s 4.4% gain.

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

View our latest analysis for Hithink RoyalFlush Information Network

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

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Hithink RoyalFlush Information Network 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 Hithink RoyalFlush Information Network's historic earnings and revenue below, but keep in mind there's always more to the story.

Hithink RoyalFlush Information Network is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Zheng Yi with 36% of shares outstanding. With 11% and 9.5% of the shares outstanding respectively, Qiongjiu Ye and Shanghai Kaishi'ao Information Consulting Center (Limited Partnership) are the second and third largest shareholders. Interestingly, the second-largest shareholder, Qiongjiu Ye is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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.

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 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¥92b stake in this CN¥165b 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 22% 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

Our data indicates that Private Companies hold 9.5%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Hithink RoyalFlush Information Network better, we need to consider many other factors. Take risks for example - Hithink RoyalFlush Information Network has 2 warning signs (and 1 which is a bit unpleasant) we think 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.