Key Insights

• The considerable ownership by retail investors in Hubei DOTI Micro Technology indicates that they collectively have a greater say in management and business strategy
• A total of 7 investors have a majority stake in the company with 51% ownership
• Insider ownership in Hubei DOTI Micro Technology is 37%

If you want to know who really controls Hubei DOTI Micro Technology Co., Ltd. (SZSE:301183), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 40% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While retail investors were the group that benefitted the most from last week's CN¥430m market cap gain, insiders too had a 37% share in those profits.

Let's take a closer look to see what the different types of shareholders can tell us about Hubei DOTI Micro Technology.

What Does The Institutional Ownership Tell Us About Hubei DOTI Micro Technology?

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 Hubei DOTI Micro Technology 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 Hubei DOTI Micro Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

Hubei DOTI Micro Technology is not owned by hedge funds. Our data shows that Denghua Gao is the largest shareholder with 20% of shares outstanding. With 15% and 5.1% of the shares outstanding respectively, Yun Xie and Ganzhou Xinyecheng Investment Management Co., Ltd. are the second and third largest shareholders. Yun Xie, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

We did some more digging and found that 7 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Hubei DOTI Micro Technology

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own a reasonable proportion of Hubei DOTI Micro Technology Co., Ltd.. Insiders own CN¥1.1b worth of shares in the CN¥3.1b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 40% 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

It seems that Private Companies own 13%, of the Hubei DOTI Micro Technology stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Hubei DOTI Micro Technology you should be aware of, and 1 of them can't be ignored.

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.