GoFintech Innovation Limited (HKG:290) surges 11%; retail investors who own 55% shares profited along with insiders

Key Insights

• The considerable ownership by retail investors in GoFintech Innovation indicates that they collectively have a greater say in management and business strategy
• A total of 6 investors have a majority stake in the company with 45% ownership
• 35% of GoFintech Innovation is held by insiders

If you want to know who really controls GoFintech Innovation Limited (HKG:290), then you'll have to look at the makeup of its share registry. With 55% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While retail investors were the group that reaped the most benefits after last week’s 11% price gain, insiders also received a 35% cut.

In the chart below, we zoom in on the different ownership groups of GoFintech Innovation.

See our latest analysis for GoFintech Innovation

What Does The Lack Of Institutional Ownership Tell Us About GoFintech Innovation?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of GoFintech Innovation, for yourself, below.

Hedge funds don't have many shares in GoFintech Innovation. Looking at our data, we can see that the largest shareholder is Zhiwei Liu with 17% of shares outstanding. For context, the second largest shareholder holds about 16% of the shares outstanding, followed by an ownership of 7.3% by the third-largest shareholder.

Our studies suggest that the top 6 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of GoFintech Innovation

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.

Our most recent data indicates that insiders own a reasonable proportion of GoFintech Innovation Limited. Insiders own HK$2.3b worth of shares in the HK$6.7b company. 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

The general public -- including retail investors -- own 55% of GoFintech Innovation. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand GoFintech Innovation better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for GoFintech Innovation you should be aware of, and 1 of them is a bit unpleasant.

Of course this may not be the best stock to buy. So take a peek at this free 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.