Key Insights

• The considerable ownership by retail investors in Bestechnic (Shanghai) indicates that they collectively have a greater say in management and business strategy
• A total of 12 investors have a majority stake in the company with 51% ownership
• Insiders own 26% of Bestechnic (Shanghai)

A look at the shareholders of Bestechnic (Shanghai) Co., Ltd. (SHSE:688608) can tell us which group is most powerful. With 29% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Retail investors gained the most after market cap touched CN¥21b last week, while insiders who own 26% also benefitted.

Let's take a closer look to see what the different types of shareholders can tell us about Bestechnic (Shanghai).

What Does The Institutional Ownership Tell Us About Bestechnic (Shanghai)?

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.

Bestechnic (Shanghai) 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 Bestechnic (Shanghai)'s earnings history below. Of course, the future is what really matters.

Bestechnic (Shanghai) is not owned by hedge funds. From our data, we infer that the largest shareholder is Xiaodong Tang (who also holds the title of Head of Corporate Communications) with 11% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. Guoguang Zhao is the second largest shareholder owning 10% of common stock, and IDG Capital holds about 8.7% of the company stock. Interestingly, the second-largest shareholder, Guoguang Zhao is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

A closer look at our ownership figures suggests that the top 12 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

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

Insider Ownership Of Bestechnic (Shanghai)

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.

It seems insiders own a significant proportion of Bestechnic (Shanghai) Co., Ltd.. It has a market capitalization of just CN¥21b, and insiders have CN¥5.3b worth of shares in their own names. That's quite significant. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Bestechnic (Shanghai). 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 a stake of 8.7%, private equity firms could influence the Bestechnic (Shanghai) board. 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 12%, of the Bestechnic (Shanghai) stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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