CEO Ning Dong, Hefei I-TEK OptoElectronics Co., Ltd.'s (SHSE:688610) largest shareholder sees value of holdings go down 13% after recent drop

Key Insights

• Insiders appear to have a vested interest in Hefei I-TEK OptoElectronics' growth, as seen by their sizeable ownership
• The top 3 shareholders own 51% of the company
• 14% of Hefei I-TEK OptoElectronics is held by Institutions

If you want to know who really controls Hefei I-TEK OptoElectronics Co., Ltd. (SHSE:688610), then you'll have to look at the makeup of its share registry. With 58% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders as a group endured the highest losses after market cap fell by CN¥311m.

In the chart below, we zoom in on the different ownership groups of Hefei I-TEK OptoElectronics.

Check out our latest analysis for Hefei I-TEK OptoElectronics

What Does The Institutional Ownership Tell Us About Hefei I-TEK OptoElectronics?

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 Hefei I-TEK OptoElectronics does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Hefei I-TEK OptoElectronics, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Hefei I-TEK OptoElectronics. The company's CEO Ning Dong is the largest shareholder with 34% of shares outstanding. The second and third largest shareholders are Jiasheng Ye and Shiyue Tang, with an equal amount of shares to their name at 8.7%. Interestingly, the second and third-largest shareholders also happen to be the Head of Marketing and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. 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 Hefei I-TEK OptoElectronics

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. 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.

It seems that insiders own more than half the Hefei I-TEK OptoElectronics Co., Ltd. stock. This gives them a lot of power. Given it has a market cap of CN¥2.1b, that means they have CN¥1.2b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 18% stake in the company, and hence can't easily be ignored. 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

Our data indicates that Private Companies hold 7.4%, 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Hefei I-TEK OptoElectronics you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.