Key Insights

• Insiders appear to have a vested interest in Hangzhou DPtech TechnologiesLtd's growth, as seen by their sizeable ownership
• 53% of the business is held by the top 2 shareholders
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

Every investor in Hangzhou DPtech Technologies Co.,Ltd. (SZSE:300768) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 54% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥7.8b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Hangzhou DPtech TechnologiesLtd.

What Does The Institutional Ownership Tell Us About Hangzhou DPtech TechnologiesLtd?

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.

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

Hangzhou DPtech TechnologiesLtd is not owned by hedge funds. Our data shows that Shusheng Zheng is the largest shareholder with 46% of shares outstanding. With 7.5% and 7.1% of the shares outstanding respectively, Hangzhou Sidao Weicheng Investment Management Partnership Enterprise (Limited Partnership) and Shunlin Zhou are the second and third largest shareholders. Shunlin Zhou, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Additionally, the company's CEO Xidian Zou directly holds 1.1% of the total shares outstanding.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Hangzhou DPtech TechnologiesLtd

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.

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.

It seems that insiders own more than half the Hangzhou DPtech Technologies Co.,Ltd. stock. This gives them a lot of power. Given it has a market cap of CN¥7.8b, that means insiders have a whopping CN¥4.2b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public, who are usually individual investors, hold a 20% stake in Hangzhou DPtech TechnologiesLtd. 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 19%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Hangzhou DPtech TechnologiesLtd better, we need to consider many other factors. For example, we've discovered 1 warning sign for Hangzhou DPtech TechnologiesLtd 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.

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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.