Key Insights

• Significant insider control over Shanghai General Healthy Information and Technology implies vested interests in company growth
• 50% of the business is held by the top 2 shareholders
• 20% of Shanghai General Healthy Information and Technology is held by Institutions

A look at the shareholders of Shanghai General Healthy Information and Technology Co., Ltd. (SHSE:605186) can tell us which group is most powerful. With 42% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders as a group endured the highest losses after market cap fell by CN¥408m.

Let's delve deeper into each type of owner of Shanghai General Healthy Information and Technology, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Shanghai General Healthy Information and 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.

Shanghai General Healthy Information and 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Shanghai General Healthy Information and Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

Shanghai General Healthy Information and Technology is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Jianwei Dai with 42% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.3% and 2.6% of the stock.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Shanghai General Healthy Information and Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 insiders own a significant proportion of Shanghai General Healthy Information and Technology Co., Ltd.. It has a market capitalization of just CN¥2.4b, and insiders have CN¥1.0b worth of shares in their own names. 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, who are usually individual investors, hold a 30% stake in Shanghai General Healthy Information and Technology. 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 Company Ownership

We can see that Private Companies own 8.3%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Shanghai General Healthy Information and Technology better, we need to consider many other factors. For example, we've discovered 2 warning signs for Shanghai General Healthy Information and Technology that you should be aware of before investing here.

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.

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.