Sunny Optical Technology (Group) Company Limited's (HKG:2382) last week's 3.6% decline must have disappointed private companies who have a significant stake

Key Insights

• The considerable ownership by private companies in Sunny Optical Technology (Group) indicates that they collectively have a greater say in management and business strategy
• The top 7 shareholders own 51% of the company
• 27% of Sunny Optical Technology (Group) is held by Institutions

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A look at the shareholders of Sunny Optical Technology (Group) Company Limited (HKG:2382) can tell us which group is most powerful. We can see that private companies own the lion's share in the company with 36% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, private companies endured the biggest losses as the stock fell by 3.6%.

Let's take a closer look to see what the different types of shareholders can tell us about Sunny Optical Technology (Group).

View our latest analysis for Sunny Optical Technology (Group)

What Does The Institutional Ownership Tell Us About Sunny Optical Technology (Group)?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Sunny Optical Technology (Group) does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Sunny Optical Technology (Group), (below). Of course, keep in mind that there are other factors to consider, too.

Sunny Optical Technology (Group) is not owned by hedge funds. Sun Xu Limited is currently the largest shareholder, with 36% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.1% and 3.1% of the stock. Wenjian Wang, who is the third-largest shareholder, also happens to hold the title of Chairman Emeritus.

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 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 Sunny Optical 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.

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.

We can see that insiders own shares in Sunny Optical Technology (Group) Company Limited. The insiders have a meaningful stake worth HK$2.5b. 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, who are usually individual investors, hold a 34% stake in Sunny Optical Technology (Group). 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 36%, of the Sunny Optical 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 Sunny Optical Technology (Group) better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Sunny Optical Technology (Group) .

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.