Newlink Technology Inc. (HKG:9600) insiders have recently purchased stock and their bets paid off last week as company hit HK$1.6b market cap

Key Insights

• Newlink Technology's significant insider ownership suggests inherent interests in company's expansion
• 55% of the business is held by the top 3 shareholders
• Insiders have bought recently

To get a sense of who is truly in control of Newlink Technology Inc. (HKG:9600), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 56% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Our data shows that insiders recently bought shares in the company and they were rewarded after market cap rose HK$179m last week.

Let's delve deeper into each type of owner of Newlink Technology, beginning with the chart below.

View our latest analysis for Newlink Technology

What Does The Lack Of Institutional Ownership Tell Us About Newlink Technology?

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 could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. 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 Newlink Technology, for yourself, below.

We note that hedge funds don't have a meaningful investment in Newlink Technology. Looking at our data, we can see that the largest shareholder is the CEO Shuchun Zhai with 32% of shares outstanding. With 15% and 8.5% of the shares outstanding respectively, Yukai Yuan and Hao Guo are the second and third largest shareholders.

After doing some more digging, we found that the top 3 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Newlink Technology

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. 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.

Our most recent data indicates that insiders own the majority of Newlink Technology Inc.. This means they can collectively make decisions for the company. Given it has a market cap of HK$1.6b, that means they have HK$907m worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 44% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Newlink Technology better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Newlink Technology (including 2 which are concerning) .

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com