Richinfo Technology Co., Ltd.'s (SZSE:300634) market cap surged CN¥492m last week, private companies who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by private companies in Richinfo Technology indicates that they collectively have a greater say in management and business strategy
• 51% of the business is held by the top 8 shareholders
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

Every investor in Richinfo Technology Co., Ltd. (SZSE:300634) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 42% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies were the biggest beneficiaries of last week’s 6.9% gain.

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

View our latest analysis for Richinfo Technology

What Does The Institutional Ownership Tell Us About Richinfo 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.

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

Richinfo Technology is not owned by hedge funds. The company's largest shareholder is Shenzhen Bailong Technology Co., Ltd., with ownership of 20%. Ji'an Wanhong Technology Co., Ltd. is the second largest shareholder owning 15% of common stock, and Liang Zhi Yang holds about 4.8% of the company stock. Liang Zhi Yang, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Richinfo 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.

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.

We can see that insiders own shares in Richinfo Technology Co., Ltd.. The insiders have a meaningful stake worth CN¥490m. Most would see this as a real positive. It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 42% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Richinfo 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

Our data indicates that Private Companies hold 42%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Richinfo Technology better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Richinfo Technology , and understanding them should be part of your investment process.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

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