Key Insights

• Significant insider control over Hithink RoyalFlush Information Network implies vested interests in company growth
• The top 3 shareholders own 57% of the company
• 14% of Hithink RoyalFlush Information Network is held by Institutions

To get a sense of who is truly in control of Hithink RoyalFlush Information Network Co., Ltd. (SZSE:300033), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 56% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

So it follows, every decision made by insiders of Hithink RoyalFlush Information Network regarding the company's future would be crucial to them.

Let's delve deeper into each type of owner of Hithink RoyalFlush Information Network, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Hithink RoyalFlush Information Network?

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 Hithink RoyalFlush Information Network. 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 Hithink RoyalFlush Information Network's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Hithink RoyalFlush Information Network. The company's CEO Zheng Yi is the largest shareholder with 36% of shares outstanding. With 11% and 9.5% of the shares outstanding respectively, Qiongjiu Ye and Shanghai Kaishi'ao Information Consulting Center (Limited Partnership) are the second and third largest shareholders. Interestingly, the second-largest shareholder, Qiongjiu Ye is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 57% stake.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Hithink RoyalFlush Information Network

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 Hithink RoyalFlush Information Network Co., Ltd. stock. This gives them a lot of power. That means insiders have a very meaningful CN¥31b stake in this CN¥54b business. 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-- including retail investors -- own 21% stake in the company, and hence can't easily be ignored. 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 9.5%, 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:

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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Hithink RoyalFlush Information Network , and understanding them should be part of your investment process.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.