Key Insights

• Significant insider control over Shenzhen Hui Chuang Da Technology implies vested interests in company growth
• A total of 2 investors have a majority stake in the company with 53% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Shenzhen Hui Chuang Da Technology Co., Ltd. (SZSE:300909) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 21% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Shenzhen Hui Chuang Da Technology.

What Does The Institutional Ownership Tell Us About Shenzhen Hui Chuang Da Technology?

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.

Shenzhen Hui Chuang Da Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Shenzhen Hui Chuang Da Technology's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Shenzhen Hui Chuang Da Technology. Looking at our data, we can see that the largest shareholder is the CEO Ming Li with 36% of shares outstanding. With 17% and 4.8% of the shares outstanding respectively, Ningbo Tongmu Venture Capital Partnership Enterprise (Limited Partnership) and Zhigang Duan are the second and third largest shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Shenzhen Hui Chuang Da Technology

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Shenzhen Hui Chuang Da Technology Co., Ltd.. Insiders own CN¥1.4b worth of shares in the CN¥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

The general public, who are usually individual investors, hold a 25% stake in Shenzhen Hui Chuang Da 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

We can see that Private Companies own 18%, of the shares on issue. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - Shenzhen Hui Chuang Da Technology has 3 warning signs we think you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.