GCH Technology Co., Ltd.'s (SHSE:688625) most bullish insider is Top Key Executive Wenlin Zhao, and their holdings value went up by 8.4% last week

Key Insights

• Significant insider control over GCH Technology implies vested interests in company growth
• 55% of the business is held by the top 2 shareholders
• Institutional ownership in GCH Technology is 14%

A look at the shareholders of GCH Technology Co., Ltd. (SHSE:688625) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 48% 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 8.4% gain.

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

Check out our latest analysis for GCH Technology

What Does The Institutional Ownership Tell Us About GCH Technology?

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 GCH Technology 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. 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 GCH Technology's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in GCH Technology. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In GCH Technology's case, its Top Key Executive, Wenlin Zhao, is the largest shareholder, holding 35% of shares outstanding. With 20% and 6.0% of the shares outstanding respectively, Shanghai Kehui Investment Management Co., Ltd. and Zheying Lin are the second and third largest shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 GCH Technology

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 insiders own a significant proportion of GCH Technology Co., Ltd.. It has a market capitalization of just CN¥5.3b, and insiders have CN¥2.5b worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over GCH Technology. 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 24%, of the GCH Technology 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 GCH Technology better, we need to consider many other factors. For instance, we've identified 2 warning signs for GCH Technology (1 makes us a bit uncomfortable) 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.