Guo Tai Epoint Software Co.,Ltd (SHSE:688232) surges 4.0%; private companies who own 43% shares profited along with insiders

Key Insights

• The considerable ownership by private companies in Guo Tai Epoint SoftwareLtd indicates that they collectively have a greater say in management and business strategy
• A total of 5 investors have a majority stake in the company with 53% ownership
• 30% of Guo Tai Epoint SoftwareLtd is held by insiders

Every investor in Guo Tai Epoint Software Co.,Ltd (SHSE:688232) should be aware of the most powerful shareholder groups. With 43% stake, private companies possess the maximum shares in the company. 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¥372m market cap gain, insiders too had a 30% share in those profits.

In the chart below, we zoom in on the different ownership groups of Guo Tai Epoint SoftwareLtd.

See our latest analysis for Guo Tai Epoint SoftwareLtd

What Does The Institutional Ownership Tell Us About Guo Tai Epoint SoftwareLtd?

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.

Guo Tai Epoint SoftwareLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Guo Tai Epoint SoftwareLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Guo Tai Epoint SoftwareLtd is not owned by hedge funds. The company's largest shareholder is Jiangsu Guotai International Trading Co.,Ltd, with ownership of 19%. In comparison, the second and third largest shareholders hold about 11% and 9.7% of the stock. Sulong Huang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Guo Tai Epoint SoftwareLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 information suggests that insiders maintain a significant holding in Guo Tai Epoint Software Co.,Ltd. It has a market capitalization of just CN¥9.6b, and insiders have CN¥2.9b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Guo Tai Epoint SoftwareLtd. 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 Company Ownership

It seems that Private Companies own 43%, of the Guo Tai Epoint SoftwareLtd stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Guo Tai Epoint SoftwareLtd , and understanding them should be part of your investment process.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.