Key Insights

• The considerable ownership by private companies in Hubei Chutian Smart CommunicationLtd indicates that they collectively have a greater say in management and business strategy
• The top 2 shareholders own 54% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Hubei Chutian Smart Communication Co.,Ltd. (SHSE:600035) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 55% 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¥6.7b last week, private companies would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Hubei Chutian Smart CommunicationLtd, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Hubei Chutian Smart CommunicationLtd?

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.

Hubei Chutian Smart CommunicationLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Hubei Chutian Smart CommunicationLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Hubei Chutian Smart CommunicationLtd. Hubei Communications Investment Group Co.,Ltd is currently the largest shareholder, with 38% of shares outstanding. China Merchants Group Limited is the second largest shareholder owning 16% of common stock, and Great Wall Life Insurance Co., Ltd, Asset Management Arm holds about 3.0% of the company stock.

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

Insider Ownership Of Hubei Chutian Smart CommunicationLtd

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.

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.

We can see that insiders own shares in Hubei Chutian Smart Communication Co.,Ltd.. In their own names, insiders own CN¥71m worth of stock in the CN¥6.7b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 38% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 55%, 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:

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 risks, for instance. Every company has them, and we've spotted 2 warning signs for Hubei Chutian Smart CommunicationLtd you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.