Private equity firms invested in Suzhou HYC Technology Co.,Ltd. (SHSE:688001) copped the brunt of last week's CN¥1.3b market cap decline

Key Insights

• The considerable ownership by private equity firms in Suzhou HYC TechnologyLtd indicates that they collectively have a greater say in management and business strategy
• 52% of the company is held by a single shareholder (Suzhou Yuanhua Chuangxing Investment Management Co., Ltd.)
• 15% of Suzhou HYC TechnologyLtd is held by insiders

To get a sense of who is truly in control of Suzhou HYC Technology Co.,Ltd. (SHSE:688001), it is important to understand the ownership structure of the business. With 52% stake, private equity firms possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of private equity firms took a hit after last week’s 9.0% price drop, insiders with their 15% also suffered.

Let's take a closer look to see what the different types of shareholders can tell us about Suzhou HYC TechnologyLtd.

See 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. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Hedge funds don't have many shares in Suzhou HYC TechnologyLtd. Suzhou Yuanhua Chuangxing Investment Management Co., Ltd. is currently the company's largest shareholder with 52% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Meanwhile, the second and third largest shareholders, hold 13% and 7.3%, of the shares outstanding, respectively. Wenyuan Chen, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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. 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 an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 Suzhou HYC Technology Co.,Ltd.. Insiders own CN¥2.0b worth of shares in the CN¥14b company. That's quite meaningful. 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

With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over 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. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

Our data indicates that Private Companies hold 15%, 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 Suzhou HYC TechnologyLtd better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Suzhou HYC TechnologyLtd (including 1 which is a bit unpleasant) .

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.