Insiders are the top stockholders in Zhuhai Comleader Information Science & Technology Co., Ltd. (SHSE:688175), and the recent 12% drop might have disappointed them

Key Insights

• Insiders appear to have a vested interest in Zhuhai Comleader Information Science & Technology's growth, as seen by their sizeable ownership
• A total of 2 investors have a majority stake in the company with 51% ownership
• 18% of Zhuhai Comleader Information Science & Technology is held by Institutions

To get a sense of who is truly in control of Zhuhai Comleader Information Science & Technology Co., Ltd. (SHSE:688175), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 43% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to CN¥2.4b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Zhuhai Comleader Information Science & Technology.

See our latest analysis for Zhuhai Comleader Information Science & Technology

What Does The Institutional Ownership Tell Us About Zhuhai Comleader Information Science & 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 Zhuhai Comleader Information Science & Technology. 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 Zhuhai Comleader Information Science & Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

Zhuhai Comleader Information Science & Technology is not owned by hedge funds. Yunlin Hu is currently the company's largest shareholder with 43% of shares outstanding. With 7.3% and 4.6% of the shares outstanding respectively, Zhuhai Hengqin New District Zixiao Investment Partnership Enterprise (Limited Partnership) and Zhuhai Hengqin New District Qucheng Investment Partnership Enterprise (Limited Partnership) are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Zhuhai Comleader Information Science & Technology

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 Zhuhai Comleader Information Science & Technology Co., Ltd.. It has a market capitalization of just CN¥2.4b, and insiders have CN¥1.1b 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 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zhuhai Comleader Information Science & Technology. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 19%, 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:

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 3 warning signs for Zhuhai Comleader Information Science & Technology (2 make us uncomfortable) that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.