Key Insights

• Significant insider control over Shaanxi Huaqin Technology IndustryLtd implies vested interests in company growth
• 53% of the business is held by the top 5 shareholders
• 16% of Shaanxi Huaqin Technology IndustryLtd is held by Institutions

If you want to know who really controls Shaanxi Huaqin Technology Industry Co.,Ltd. (SHSE:688281), then you'll have to look at the makeup of its share registry. With 52% 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).

And following last week's 4.2% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Shaanxi Huaqin Technology IndustryLtd.

What Does The Institutional Ownership Tell Us About Shaanxi Huaqin Technology IndustryLtd?

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 Shaanxi Huaqin Technology IndustryLtd does have institutional investors; and they hold a good portion of the company's stock. 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 Shaanxi Huaqin Technology IndustryLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Shaanxi Huaqin Technology IndustryLtd is not owned by hedge funds. Our data shows that Shengyang Zhe is the largest shareholder with 23% of shares outstanding. Wancheng Zhou is the second largest shareholder owning 11% of common stock, and Shaanxi Huaqin Wansheng Business Information Consulting Partnership Enterprise (Limited Partnership) holds about 8.1% of the company stock. Wancheng Zhou, who is the second-largest shareholder, also happens to hold the title of Chief Scientific Officer.

On looking further, we found that 53% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Shaanxi Huaqin Technology IndustryLtd

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own the majority of Shaanxi Huaqin Technology Industry Co.,Ltd.. This means they can collectively make decisions for the company. Insiders own CN¥8.4b worth of shares in the CN¥16b company. That's extraordinary! It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public, who are usually individual investors, hold a 25% stake in Shaanxi Huaqin Technology IndustryLtd. 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

We can see that Private Companies own 8.1%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.