Key Insights

• Significant control over Guo Tai Epoint SoftwareLtd by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 5 shareholders own 52% of the company
• 29% of Guo Tai Epoint SoftwareLtd is held by insiders

If you want to know who really controls Guo Tai Epoint Software Co.,Ltd (SHSE:688232), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 42% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While private companies were the group that reaped the most benefits after last week's 6.2% price gain, insiders also received a 29% cut.

Let's take a closer look to see what the different types of shareholders can tell us about Guo Tai Epoint SoftwareLtd.

What Does The Institutional Ownership Tell Us About Guo Tai Epoint SoftwareLtd?

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 Guo Tai Epoint SoftwareLtd. 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 Guo Tai Epoint SoftwareLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Guo Tai Epoint SoftwareLtd. Our data shows that Jiangsu Guotai International Trading Co.,Ltd is the largest shareholder with 19% of shares outstanding. With 11% and 9.6% of the shares outstanding respectively, Libin Cao and Sulong Huang are the second and third largest shareholders. Sulong Huang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Guo Tai Epoint SoftwareLtd

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.

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 Guo Tai Epoint Software Co.,Ltd. It has a market capitalization of just CN¥6.4b, and insiders have CN¥1.9b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 15% stake in Guo Tai Epoint SoftwareLtd. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 42%, of the shares on issue. 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 Guo Tai Epoint SoftwareLtd better, we need to consider many other factors. Be aware that Guo Tai Epoint SoftwareLtd is showing 3 warning signs in our investment analysis , you should know about...

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.

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