Institutions profited after Fortior Technology (Shenzhen) Co., Ltd.'s (SHSE:688279) market cap rose CN¥1.2b last week but private companies profited the most

Key Insights

• The considerable ownership by private companies in Fortior Technology (Shenzhen) indicates that they collectively have a greater say in management and business strategy
• 51% of the business is held by the top 2 shareholders
• Institutional ownership in Fortior Technology (Shenzhen) is 26%

Every investor in Fortior Technology (Shenzhen) Co., Ltd. (SHSE:688279) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 42% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 6.5% increase in the stock price last week, private companies profited the most, but institutions who own 26% stock also stood to gain from the increase.

Let's delve deeper into each type of owner of Fortior Technology (Shenzhen), beginning with the chart below.

Check out our latest analysis for Fortior Technology (Shenzhen)

What Does The Institutional Ownership Tell Us About Fortior Technology (Shenzhen)?

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 Fortior Technology (Shenzhen) 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 Fortior Technology (Shenzhen)'s historic earnings and revenue below, but keep in mind there's always more to the story.

Fortior Technology (Shenzhen) is not owned by hedge funds. The company's largest shareholder is Fortior Technology (HK) Company Limited, with ownership of 38%. With 13% and 3.9% of the shares outstanding respectively, Huaxin (Shanghai) Venture Capital Management Co., Ltd. and Fullgoal Fund Management Co. Ltd. are the second and third largest shareholders. Furthermore, CEO Bi Lei is the owner of 1.5% of the company's shares.

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.

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 Fortior Technology (Shenzhen)

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Shareholders would probably be interested to learn that insiders own shares in Fortior Technology (Shenzhen) Co., Ltd.. This is a big company, so it is good to see this level of alignment. Insiders own CN¥283m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

With a 18% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Fortior Technology (Shenzhen). 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 Equity Ownership

Private equity firms hold a 13% stake in Fortior Technology (Shenzhen). This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

It seems that Private Companies own 42%, of the Fortior Technology (Shenzhen) stock. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 2 warning signs for Fortior Technology (Shenzhen) (1 doesn't sit too well with us) that you should be aware of.

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.