Key Insights

• Significant insider control over Shanghai BOCHU Electronic Technology implies vested interests in company growth
• 57% of the business is held by the top 4 shareholders
• Institutions own 16% of Shanghai BOCHU Electronic Technology

A look at the shareholders of Shanghai BOCHU Electronic Technology Corporation Limited. (SHSE:688188) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 66% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit CN¥30b market cap following a 3.3% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Shanghai BOCHU Electronic Technology.

What Does The Institutional Ownership Tell Us About Shanghai BOCHU Electronic 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.

We can see that Shanghai BOCHU Electronic Technology does have institutional investors; and they hold a good portion of the company's stock. 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 Shanghai BOCHU Electronic Technology's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Shanghai BOCHU Electronic Technology. Ye Tang is currently the company's largest shareholder with 19% of shares outstanding. In comparison, the second and third largest shareholders hold about 15% and 13% of the stock.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Shanghai BOCHU Electronic Technology

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Our most recent data indicates that insiders own the majority of Shanghai BOCHU Electronic Technology Corporation Limited.. This means they can collectively make decisions for the company. That means insiders have a very meaningful CN¥20b stake in this CN¥30b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 18% stake in Shanghai BOCHU Electronic 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. To that end, you should be aware of the 1 warning sign we've spotted with Shanghai BOCHU Electronic Technology .

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