Insiders were the key beneficiaries as Shaanxi Huaqin Technology Industry Co.,Ltd.'s (SHSE:688281) market cap rises to CN¥15b

Key Insights

• Significant insider control over Shaanxi Huaqin Technology IndustryLtd implies vested interests in company growth
• A total of 5 investors have a majority stake in the company with 53% ownership
• 14% of Shaanxi Huaqin Technology IndustryLtd is held by Institutions

To get a sense of who is truly in control of Shaanxi Huaqin Technology Industry Co.,Ltd. (SHSE:688281), 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 52% ownership. 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¥15b market cap following a 5.9% gain in the stock.

Let's delve deeper into each type of owner of Shaanxi Huaqin Technology IndustryLtd, beginning with the chart below.

View our latest analysis for Shaanxi Huaqin Technology IndustryLtd

What Does The Institutional Ownership Tell Us About Shaanxi Huaqin Technology IndustryLtd?

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 Shaanxi Huaqin Technology IndustryLtd 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. 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 Shaanxi Huaqin Technology IndustryLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Shaanxi Huaqin Technology IndustryLtd is not owned by hedge funds. Our data shows that Shengyang Zhe is the largest shareholder with 23% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 8.1%, of the shares outstanding, respectively. Wancheng Zhou, who is the second-largest shareholder, also happens to hold the title of Chief Scientific Officer.

Our research also brought to light the fact that roughly 53% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Shaanxi Huaqin Technology IndustryLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

It seems that insiders own more than half the Shaanxi Huaqin Technology Industry Co.,Ltd. stock. This gives them a lot of power. That means insiders have a very meaningful CN¥7.9b stake in this CN¥15b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shaanxi Huaqin Technology IndustryLtd. 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

It seems that Private Companies own 8.1%, of the Shaanxi Huaqin Technology IndustryLtd 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Shaanxi Huaqin Technology IndustryLtd better, we need to consider many other factors. For instance, we've identified 1 warning sign for Shaanxi Huaqin Technology IndustryLtd 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.

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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.