Key Insights

• Insiders appear to have a vested interest in Chengdu Lihang Technology CoLtd's growth, as seen by their sizeable ownership
• 63% of the company is held by a single shareholder (Suiyang Liu)
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Chengdu Lihang Technology Co,Ltd. (SHSE:603261) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 66% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As market cap fell to CN¥2.4b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Chengdu Lihang Technology CoLtd, beginning with the chart below.

View our latest analysis for Chengdu Lihang Technology CoLtd

What Does The Institutional Ownership Tell Us About Chengdu Lihang Technology CoLtd?

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.

We can see that Chengdu Lihang Technology CoLtd does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Chengdu Lihang Technology CoLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Chengdu Lihang Technology CoLtd. Looking at our data, we can see that the largest shareholder is the CEO Suiyang Liu with 63% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. In comparison, the second and third largest shareholders hold about 3.3% and 2.3% of the stock.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Chengdu Lihang Technology CoLtd

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 Chengdu Lihang Technology Co,Ltd. stock. This gives them a lot of power. That means they own CN¥1.6b worth of shares in the CN¥2.4b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 24% stake in Chengdu Lihang Technology CoLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Chengdu Lihang Technology CoLtd better, we need to consider many other factors. For instance, we've identified 3 warning signs for Chengdu Lihang Technology CoLtd (2 shouldn't be ignored) that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.