Private companies invested in Ying Han Technology Co., Ltd. (TWSE:4562) copped the brunt of last week's NT$604m market cap decline

Key Insights

• Ying Han Technology's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 6 investors have a majority stake in the company with 55% ownership
• Insiders own 34% of Ying Han Technology

To get a sense of who is truly in control of Ying Han Technology Co., Ltd. (TWSE:4562), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 37% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of private companies took a hit after last week’s 10% price drop, insiders with their 34% also suffered.

In the chart below, we zoom in on the different ownership groups of Ying Han Technology.

View our latest analysis for Ying Han Technology

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

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Ying Han Technology'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.

Ying Han Technology is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Ying Lin Machine Industrial Co., Ltd. with 17% of shares outstanding. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 7.2% by the third-largest shareholder.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 Ying Han Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems insiders own a significant proportion of Ying Han Technology Co., Ltd.. It has a market capitalization of just NT$5.4b, and insiders have NT$1.8b worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 29% stake in Ying Han Technology. 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

Our data indicates that Private Companies hold 37%, of the company's shares. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Ying Han Technology you should know about.

Of course this may not be the best stock to buy. So take a peek at this free 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.