Individual investors are AsiaInfo Technologies Limited's (HKG:1675) biggest owners and were hit after market cap dropped HK$461m

Key Insights

• The considerable ownership by individual investors in AsiaInfo Technologies indicates that they collectively have a greater say in management and business strategy
• 56% of the business is held by the top 4 shareholders
• Insiders own 12% of AsiaInfo Technologies

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If you want to know who really controls AsiaInfo Technologies Limited (HKG:1675), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 32% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 5.9% decline in share price, individual investors suffered the most losses.

In the chart below, we zoom in on the different ownership groups of AsiaInfo Technologies.

See our latest analysis for AsiaInfo Technologies

What Does The Institutional Ownership Tell Us About AsiaInfo Technologies?

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.

We can see that AsiaInfo Technologies does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 AsiaInfo Technologies' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in AsiaInfo Technologies. Asiainfo Security Technologies Co.,Ltd. is currently the company's largest shareholder with 20% of shares outstanding. China Mobile Communications Group Co., Ltd. is the second largest shareholder owning 19% of common stock, and Suning Tian holds about 9.6% of the company stock. Suning Tian, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. Furthermore, CEO Nianshu Gao is the owner of 2.4% of the company's shares.

On looking further, we found that 56% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of AsiaInfo Technologies

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 most recent data indicates that insiders own a reasonable proportion of AsiaInfo Technologies Limited. Insiders own HK$874m worth of shares in the HK$7.3b 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, who are usually individual investors, hold a 32% stake in AsiaInfo Technologies. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 19%, of the shares on issue. 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.

Public Company Ownership

It appears to us that public companies own 20% of AsiaInfo Technologies. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with AsiaInfo Technologies .

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.