Hytera Communications Corporation Limited's (SZSE:002583) market cap up CN¥4.1b last week, benefiting both individual investors who own 47% as well as insiders

Key Insights

• Significant control over Hytera Communications by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 9 shareholders own 50% of the company
• Insiders own 40% of Hytera Communications

Every investor in Hytera Communications Corporation Limited (SZSE:002583) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 47% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Individual investors gained the most after market cap touched CN¥27b last week, while insiders who own 40% also benefitted.

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

See our latest analysis for Hytera Communications

What Does The Institutional Ownership Tell Us About Hytera Communications?

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.

As you can see, institutional investors have a fair amount of stake in Hytera Communications. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Hytera Communications' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Hytera Communications. From our data, we infer that the largest shareholder is Qingzhou Chen (who also holds the title of Top Key Executive) with 40% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. Shenzhen Investment Holding Capital Co., Ltd. is the second largest shareholder owning 2.6% of common stock, and Zhuhai Abama Asset Management Co., Ltd. holds about 2.2% of the company stock.

We did some more digging and found that 9 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Hytera Communications

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 most recent data indicates that insiders own a reasonable proportion of Hytera Communications Corporation Limited. It is very interesting to see that insiders have a meaningful CN¥11b stake in this CN¥27b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 47% stake in Hytera Communications. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hytera Communications better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Hytera Communications .

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.