Hesai Group's (NASDAQ:HSAI) market cap rose US$70m last week; retail investors who hold 30% profited and so did insiders

Key Insights

• Hesai Group's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 9 shareholders own 53% of the company
• 24% of Hesai Group is held by insiders

Every investor in Hesai Group (NASDAQ:HSAI) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 30% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 3.2% increase in the stock price last week, retail investors profited the most, but insiders who own 24% stock also stood to gain from the increase.

Let's take a closer look to see what the different types of shareholders can tell us about Hesai Group.

View our latest analysis for Hesai Group

What Does The Institutional Ownership Tell Us About Hesai 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.

As you can see, institutional investors have a fair amount of stake in Hesai Group. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Hesai Group's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Hesai Group. The company's largest shareholder is Lightspeed Ventures, LLC, with ownership of 8.4%. With 8.0% and 7.8% of the shares outstanding respectively, Kai Sun and Yifan Li are the second and third largest shareholders. Interestingly, the bottom two of the top three shareholders also hold the title of Top Key Executive and Member of the Board of Directors, respectively, suggesting that these insiders have a personal stake in the company.

We did some more digging and found that 9 of the top shareholders account for roughly 53% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Hesai Group

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.

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 information suggests that insiders maintain a significant holding in Hesai Group. It has a market capitalization of just US$2.2b, and insiders have US$549m worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 30% stake in Hesai Group. 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 Equity Ownership

With an ownership of 8.4%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

It seems that Private Companies own 10%, of the Hesai Group stock. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hesai Group better, we need to consider many other factors. For example, we've discovered 1 warning sign for Hesai Group that you should be aware of before investing here.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.