Private companies among Harbin Hatou Investment Co.,Ltd's (SHSE:600864) largest shareholders, saw gain in holdings value after stock jumped 3.9% last week

Key Insights

• The considerable ownership by private companies in Harbin Hatou InvestmentLtd indicates that they collectively have a greater say in management and business strategy
• The top 3 shareholders own 52% of the company
• 13% of Harbin Hatou InvestmentLtd is held by Institutions

A look at the shareholders of Harbin Hatou Investment Co.,Ltd (SHSE:600864) can tell us which group is most powerful. With 49% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, private companies benefitted the most after the company's market cap rose by CN¥375m last week.

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

View our latest analysis for Harbin Hatou InvestmentLtd

What Does The Institutional Ownership Tell Us About Harbin Hatou InvestmentLtd?

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.

Harbin Hatou InvestmentLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Harbin Hatou InvestmentLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Harbin Hatou InvestmentLtd. Harbin Municipal People's Government State owned Assets Supervision and Administration Commission is currently the company's largest shareholder with 37% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 4.9%, of the shares outstanding, respectively.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 52% 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Harbin Hatou InvestmentLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 data suggests that insiders own under 1% of Harbin Hatou Investment Co.,Ltd in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Keep in mind that it's a big company, and the insiders own CN¥298k worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 38% stake in Harbin Hatou InvestmentLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 49%, of the company's shares. 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. For example, we've discovered 2 warning signs for Harbin Hatou InvestmentLtd (1 is potentially serious!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com