G-bits Network Technology (Xiamen) Co., Ltd.'s (SHSE:603444) largest shareholder, CEO Hong Yan Lu sees holdings value fall by 3.7% following recent drop

Key Insights

• Insiders appear to have a vested interest in G-bits Network Technology (Xiamen)'s growth, as seen by their sizeable ownership
• A total of 10 investors have a majority stake in the company with 50% ownership
• 13% of G-bits Network Technology (Xiamen) is held by Institutions

Every investor in G-bits Network Technology (Xiamen) Co., Ltd. (SHSE:603444) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 45% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, insiders endured the biggest losses as the stock fell by 3.7%.

Let's take a closer look to see what the different types of shareholders can tell us about G-bits Network Technology (Xiamen).

See our latest analysis for G-bits Network Technology (Xiamen)

What Does The Institutional Ownership Tell Us About G-bits Network Technology (Xiamen)?

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.

G-bits Network Technology (Xiamen) already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 G-bits Network Technology (Xiamen)'s historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in G-bits Network Technology (Xiamen). With a 30% stake, CEO Hong Yan Lu is the largest shareholder. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 1.9% by the third-largest shareholder. Interestingly, the second-largest shareholder, Tuo Lin Chen is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 10 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of G-bits Network Technology (Xiamen)

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 insiders own a significant proportion of G-bits Network Technology (Xiamen) Co., Ltd.. Insiders own CN¥6.0b worth of shares in the CN¥13b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 42% stake in G-bits Network Technology (Xiamen). 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com