Hwatsing Technology Co., Ltd. (SHSE:688120) most popular amongst private companies who own 39% of the shares, institutions hold 38%

Key Insights

• Significant control over Hwatsing Technology by private companies implies that the general public has more power to influence management and governance-related decisions
• A total of 5 investors have a majority stake in the company with 51% ownership
• Institutions own 38% of Hwatsing Technology

A look at the shareholders of Hwatsing Technology Co., Ltd. (SHSE:688120) can tell us which group is most powerful. We can see that private companies own the lion's share in the company with 39% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Institutions, on the other hand, account for 38% of the company's stockholders. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.

In the chart below, we zoom in on the different ownership groups of Hwatsing Technology.

View our latest analysis for Hwatsing Technology

What Does The Institutional Ownership Tell Us About Hwatsing Technology?

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 Hwatsing Technology does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Hwatsing Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Hwatsing Technology is not owned by hedge funds. The company's largest shareholder is Sichuan Development Holding Co.,Ltd., with ownership of 28%. Xinchun Lu is the second largest shareholder owning 8.9% of common stock, and Qingjin Houde (Tianjin) Technology Partnership Enterprise (Limited Partnership) holds about 6.5% of the company stock. Xinchun Lu, 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 51% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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 Hwatsing 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. 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.

We can see that insiders own shares in Hwatsing Technology Co., Ltd.. The insiders have a meaningful stake worth CN¥2.6b. Most would see this as a real positive. Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hwatsing 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

We can see that Private Companies own 39%, of the shares on issue. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Hwatsing Technology , and understanding them should be part of your investment process.

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.