Beijing Huaru Technology Co., Ltd.'s (SZSE:301302) market cap rose CN¥383m last week; individual investors who hold 36% profited and so did insiders

Key Insights

• The considerable ownership by individual investors in Beijing Huaru Technology indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 5 shareholders
• 34% of Beijing Huaru Technology is held by insiders

A look at the shareholders of Beijing Huaru Technology Co., Ltd. (SZSE:301302) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 36% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While individual investors were the group that benefitted the most from last week’s CN¥383m market cap gain, insiders too had a 34% share in those profits.

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

See our latest analysis for Beijing Huaru Technology

What Does The Institutional Ownership Tell Us About Beijing Huaru Technology?

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 Beijing Huaru Technology 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Beijing Huaru Technology's earnings history below. Of course, the future is what really matters.

Beijing Huaru Technology is not owned by hedge funds. Jie Li is currently the largest shareholder, with 15% of shares outstanding. With 14% and 13% of the shares outstanding respectively, Chao Han and Nanjing Huaru Zhiyuan Venture Capital Partnership Enterprise (Limited Partnership) are the second and third largest shareholders. Chao Han, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

Our research also brought to light the fact that roughly 50% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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 Beijing Huaru Technology

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

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.

Our most recent data indicates that insiders own a reasonable proportion of Beijing Huaru Technology Co., Ltd.. It has a market capitalization of just CN¥4.2b, and insiders have CN¥1.4b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Beijing Huaru Technology. 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

We can see that Private Companies own 17%, of the shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for Beijing Huaru Technology that you should be aware of.

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.