Key Insights

• Insiders appear to have a vested interest in Fujian Highton Development's growth, as seen by their sizeable ownership
• The largest shareholder of the company is Erbin Zeng with a 64% stake
• Institutional ownership in Fujian Highton Development is 11%

To get a sense of who is truly in control of Fujian Highton Development Co., Ltd. (SHSE:603162), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 66% to be precise, is individual insiders. 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 were the biggest beneficiaries of last week's 5.1% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Fujian Highton Development.

What Does The Institutional Ownership Tell Us About Fujian Highton Development?

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.

As you can see, institutional investors have a fair amount of stake in Fujian Highton Development. 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 Fujian Highton Development's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Fujian Highton Development. Looking at our data, we can see that the largest shareholder is Erbin Zeng with 64% of shares outstanding. This implies that they have majority interest control of the future of the company. With 4.8% and 3.5% of the shares outstanding respectively, Pingtan Qunhang Investment Partnership Enterprise (Limited Partnership) and Fujian Xingtan Private Equity Investment Management Co., Ltd. are the second and third largest shareholders. In addition, we found that Yufang Zheng, the CEO has 1.5% of the shares allocated to their name.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Fujian Highton Development

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.

Our most recent data indicates that insiders own the majority of Fujian Highton Development Co., Ltd.. This means they can collectively make decisions for the company. Insiders own CN¥5.0b worth of shares in the CN¥7.6b company. That's extraordinary! 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-- including retail investors -- own 14% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 8.8%, of the company's shares. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 3 warning signs for Fujian Highton Development (1 is a bit concerning) that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.