Allwinnertech Technology Co.,Ltd.'s (SZSE:300458) market cap increased by CN¥549m, insiders receive a 50% cut

Key Insights

• Allwinnertech TechnologyLtd's significant insider ownership suggests inherent interests in company's expansion
• 51% of the business is held by the top 9 shareholders
• 10% of Allwinnertech TechnologyLtd is held by Institutions

To get a sense of who is truly in control of Allwinnertech Technology Co.,Ltd. (SZSE:300458), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 50% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 4.5% gain.

Let's delve deeper into each type of owner of Allwinnertech TechnologyLtd, beginning with the chart below.

View our latest analysis for Allwinnertech TechnologyLtd

What Does The Institutional Ownership Tell Us About Allwinnertech TechnologyLtd?

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.

We can see that Allwinnertech TechnologyLtd 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. 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 Allwinnertech TechnologyLtd'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 Allwinnertech TechnologyLtd. Our data shows that Jian Hui Zhang is the largest shareholder with 11% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.8% and 9.5% of the stock. Interestingly, the bottom two of the top three shareholders also hold the title of Senior Key Executive and Member of the Board of Directors, respectively, suggesting that these insiders have a personal stake in the company.

On further inspection, we found that more than half the company's shares are owned by the top 9 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Allwinnertech TechnologyLtd

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.

Our most recent data indicates that insiders own the majority of Allwinnertech Technology Co.,Ltd.. This means they can collectively make decisions for the company. That means insiders have a very meaningful CN¥6.4b stake in this CN¥13b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public-- including retail investors -- own 39% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Allwinnertech TechnologyLtd better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Allwinnertech TechnologyLtd .

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