Private equity firms invested in Suzhou HYC Technology Co.,Ltd. (SHSE:688001) copped the brunt of last week's CN¥569m market cap decline

Key Insights

• Suzhou HYC TechnologyLtd's significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
• 52% of the company is held by a single shareholder (Suzhou Yuanhua Chuangxing Investment Management Co., Ltd.)
• Insiders own 15% of Suzhou HYC TechnologyLtd

A look at the shareholders of Suzhou HYC Technology Co.,Ltd. (SHSE:688001) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private equity firms with 52% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 5.8% decline in share price, private equity firms suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Suzhou HYC TechnologyLtd.

View our latest analysis for Suzhou HYC TechnologyLtd

What Does The Institutional Ownership Tell Us About Suzhou HYC TechnologyLtd?

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.

Since institutions own only a small portion of Suzhou HYC TechnologyLtd, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Suzhou HYC TechnologyLtd is not owned by hedge funds. Suzhou Yuanhua Chuangxing Investment Management Co., Ltd. is currently the company's largest shareholder with 52% of shares outstanding. This implies that they have majority interest control of the future of the company. With 13% and 7.3% of the shares outstanding respectively, Wenyuan Chen and Suzhou Yuanfen Enterprise Management Partnership Enterprise (Limited Partnership) are the second and third largest shareholders. Wenyuan Chen, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Suzhou HYC 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders maintain a significant holding in Suzhou HYC Technology Co.,Ltd.. It is very interesting to see that insiders have a meaningful CN¥1.4b stake in this CN¥9.2b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 16% stake in Suzhou HYC TechnologyLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 52% stake in Suzhou HYC TechnologyLtd. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

It seems that Private Companies own 15%, of the Suzhou HYC TechnologyLtd 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. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Suzhou HYC TechnologyLtd you should know about.

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.