Shenzhen Bluetrum Technology Co., Ltd.'s (SHSE:688332) 7.6% gain last week benefited both private companies who own 37% as well as insiders

Key Insights

• Significant control over Shenzhen Bluetrum Technology by private companies implies that the general public has more power to influence management and governance-related decisions
• A total of 3 investors have a majority stake in the company with 51% ownership
• Insiders own 26% of Shenzhen Bluetrum Technology

To get a sense of who is truly in control of Shenzhen Bluetrum Technology Co., Ltd. (SHSE:688332), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies with 37% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While private companies were the group that benefitted the most from last week’s CN¥480m market cap gain, insiders too had a 26% share in those profits.

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

View our latest analysis for Shenzhen Bluetrum Technology

What Does The Institutional Ownership Tell Us About Shenzhen Bluetrum 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.

As you can see, institutional investors have a fair amount of stake in Shenzhen Bluetrum Technology. 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 Shenzhen Bluetrum Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Shenzhen Bluetrum Technology is not owned by hedge funds. Zhiqiang Huang is currently the company's largest shareholder with 26% of shares outstanding. The second and third largest shareholders are Zhuhai Bluetrum Technology Partnership Enterprise (Limited Partnership) and Zhuhai Bluetrum Management Consulting Partnership Enterprise (Limited Partnership), with an equal amount of shares to their name at 13%.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Shenzhen Bluetrum Technology

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems insiders own a significant proportion of Shenzhen Bluetrum Technology Co., Ltd.. Insiders own CN¥1.8b worth of shares in the CN¥6.8b company. 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

The general public, who are usually individual investors, hold a 14% stake in Shenzhen Bluetrum Technology. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 37%, of the Shenzhen Bluetrum Technology 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. Be aware that Shenzhen Bluetrum Technology is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

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.

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