Retail investors in Shanghai HeartCare Medical Technology Corporation Limited (HKG:6609) are its biggest bettors, and their bets paid off as stock gained 10% last week

Key Insights

• Significant control over Shanghai HeartCare Medical Technology by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 7 investors have a majority stake in the company with 52% ownership
• Insider ownership in Shanghai HeartCare Medical Technology is 18%

A look at the shareholders of Shanghai HeartCare Medical Technology Corporation Limited (HKG:6609) can tell us which group is most powerful. The group holding the most number of shares in the company, around 30% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, retail investors benefitted the most after the company's market cap rose by HK$78m last week.

In the chart below, we zoom in on the different ownership groups of Shanghai HeartCare Medical Technology.

Check out our latest analysis for Shanghai HeartCare Medical Technology

What Does The Institutional Ownership Tell Us About Shanghai HeartCare Medical Technology?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Shanghai HeartCare Medical Technology. 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 Shanghai HeartCare Medical Technology's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Shanghai HeartCare Medical Technology. Looking at our data, we can see that the largest shareholder is Lyfe Capital with 15% of shares outstanding. For context, the second largest shareholder holds about 10% of the shares outstanding, followed by an ownership of 7.3% by the third-largest shareholder. Guohui Wang, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Shanghai HeartCare Medical Technology

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.

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 insiders own a significant proportion of Shanghai HeartCare Medical Technology Corporation Limited. Insiders own HK$151m worth of shares in the HK$851m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 30% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shanghai HeartCare Medical Technology. 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 Equity Ownership

With an ownership of 15%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

It seems that Private Companies own 28%, of the Shanghai HeartCare Medical Technology stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for Shanghai HeartCare Medical Technology you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.