Qingdao AInnovation Technology Group Co., Ltd.'s (HKG:2121) largest shareholders are private equity firms who were rewarded as market cap surged HK$412m last week

Key Insights

• Significant control over Qingdao AInnovation Technology Group by private equity firms implies that the general public has more power to influence management and governance-related decisions
• The top 4 shareholders own 57% of the company
• Insiders have bought recently

If you want to know who really controls Qingdao AInnovation Technology Group Co., Ltd. (HKG:2121), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private equity firms with 39% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private equity firms collectively scored the highest last week as the company hit HK$3.2b market cap following a 15% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Qingdao AInnovation Technology Group.

View our latest analysis for Qingdao AInnovation Technology Group

What Does The Institutional Ownership Tell Us About Qingdao AInnovation Technology Group?

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.

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

Qingdao AInnovation Technology Group is not owned by hedge funds. Sinovation Ventures (Beijing) Enterprise Management Limited is currently the company's largest shareholder with 26% of shares outstanding. CICC ALPHA (Beijing) Private Investment Fund Management Co., Ltd. is the second largest shareholder owning 13% of common stock, and Hui Xu holds about 11% of the company stock. Hui Xu, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Qingdao AInnovation Technology Group

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

It seems insiders own a significant proportion of Qingdao AInnovation Technology Group Co., Ltd.. Insiders own HK$613m worth of shares in the HK$3.2b 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 22% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Qingdao AInnovation Technology Group. 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 a stake of 39%, private equity firms could influence the Qingdao AInnovation Technology Group board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

It seems that Private Companies own 5.4%, of the Qingdao AInnovation Technology Group stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Qingdao AInnovation Technology Group better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Qingdao AInnovation Technology Group you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.