China Electronics Optics Valley Union Holding Company Limited's (HKG:798) stock price dropped 11% last week; private companies would not be happy

Key Insights

• China Electronics Optics Valley Union Holding's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 60% of the business is held by the top 2 shareholders
• Insiders own 27% of China Electronics Optics Valley Union Holding

A look at the shareholders of China Electronics Optics Valley Union Holding Company Limited (HKG:798) can tell us which group is most powerful. We can see that private companies own the lion's share in the company with 41% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, private companies endured the biggest losses as the stock fell by 11%.

Let's take a closer look to see what the different types of shareholders can tell us about China Electronics Optics Valley Union Holding.

See our latest analysis for China Electronics Optics Valley Union Holding

What Does The Lack Of Institutional Ownership Tell Us About China Electronics Optics Valley Union Holding?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

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. Alternatively, there might be something about the company that has kept institutional investors away. China Electronics Optics Valley Union Holding's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Hedge funds don't have many shares in China Electronics Optics Valley Union Holding. China Electronics Corporation is currently the company's largest shareholder with 34% of shares outstanding. Liping Huang is the second largest shareholder owning 26% of common stock, and Hubei Science Technology Investment Group Co.Ltd holds about 6.5% of the company stock. Liping Huang, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 2 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of China Electronics Optics Valley Union Holding

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders maintain a significant holding in China Electronics Optics Valley Union Holding Company Limited. Insiders own HK$563m worth of shares in the HK$2.1b 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 32% ownership, the general public, mostly comprising of individual investors, have some degree of sway over China Electronics Optics Valley Union Holding. 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

It seems that Private Companies own 41%, of the China Electronics Optics Valley Union Holding stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand China Electronics Optics Valley Union Holding better, we need to consider many other factors. Take risks for example - China Electronics Optics Valley Union Holding has 4 warning signs (and 1 which doesn't sit too well with us) we think 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.