Key Insights

• Hangzhou Huaxing Chuangye Communication Technology's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 44% of the business is held by the top 25 shareholders
• Insiders own 17% of Hangzhou Huaxing Chuangye Communication Technology

If you want to know who really controls Hangzhou Huaxing Chuangye Communication Technology Co., Ltd. (SZSE:300025), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 56% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Individual investors gained the most after market cap touched CN¥5.0b last week, while insiders who own 17% also benefitted.

Let's take a closer look to see what the different types of shareholders can tell us about Hangzhou Huaxing Chuangye Communication Technology.

What Does The Institutional Ownership Tell Us About Hangzhou Huaxing Chuangye Communication Technology?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Hangzhou Huaxing Chuangye Communication Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Hangzhou Huaxing Chuangye Communication 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 Hangzhou Huaxing Chuangye Communication Technology. The company's largest shareholder is Shanghai Wanrui Chuangxiang Network Technology Co., Ltd., with ownership of 16%. For context, the second largest shareholder holds about 9.6% of the shares outstanding, followed by an ownership of 2.7% by the third-largest shareholder.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 Hangzhou Huaxing Chuangye Communication Technology

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Hangzhou Huaxing Chuangye Communication Technology Co., Ltd.. Insiders have a CN¥837m stake in this CN¥5.0b business. 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, mostly comprising of individual investors, collectively holds 56% of Hangzhou Huaxing Chuangye Communication Technology shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

We can see that Private Companies own 17%, 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 - Hangzhou Huaxing Chuangye Communication Technology has 2 warning signs (and 1 which shouldn't be ignored) we think 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.

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