Key Insights

• Significant insider control over Shenzhen Xinyichang Technology implies vested interests in company growth
• A total of 2 investors have a majority stake in the company with 67% ownership
• 16% of Shenzhen Xinyichang Technology is held by Institutions

A look at the shareholders of Shenzhen Xinyichang Technology Co., Ltd. (SHSE:688383) can tell us which group is most powerful. The group holding the most number of shares in the company, around 69% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by CN¥522m last week.

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

What Does The Institutional Ownership Tell Us About Shenzhen Xinyichang Technology?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Shenzhen Xinyichang 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Shenzhen Xinyichang Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Shenzhen Xinyichang Technology. Our data shows that Xinrong Hu is the largest shareholder with 37% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 30% and 2.2%, of the shares outstanding, respectively. Changning Song, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 67% stake.

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

Insider Ownership Of Shenzhen Xinyichang 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems that insiders own more than half the Shenzhen Xinyichang Technology Co., Ltd. stock. This gives them a lot of power. Given it has a market cap of CN¥4.9b, that means they have CN¥3.4b worth of shares. 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

The general public, who are usually individual investors, hold a 13% stake in Shenzhen Xinyichang Technology. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Shenzhen Xinyichang Technology has 3 warning signs (and 1 which shouldn't be ignored) we think you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

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