Key Insights

• Significant control over Hi-Trend Technology (Shanghai) by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 5 shareholders own 55% of the company
• Insider ownership in Hi-Trend Technology (Shanghai) is 27%

If you want to know who really controls Hi-Trend Technology (Shanghai) Co., Ltd. (SHSE:688391), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 34% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Private companies gained the most after market cap touched CN¥3.6b last week, while insiders who own 27% also benefitted.

Let's take a closer look to see what the different types of shareholders can tell us about Hi-Trend Technology (Shanghai).

What Does The Institutional Ownership Tell Us About Hi-Trend Technology (Shanghai)?

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.

Hi-Trend Technology (Shanghai) 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 Hi-Trend Technology (Shanghai)'s earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Hi-Trend Technology (Shanghai). Hi -Trend Technology (HK) Co., is currently the largest shareholder, with 17% of shares outstanding. The second and third largest shareholders are Yuan Liang Shang and Ching-Yi Huang, with an equal amount of shares to their name at 11%. Additionally, the company's CEO Wenchang Zheng directly holds 1.5% of the total shares outstanding.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Hi-Trend Technology (Shanghai)

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

It seems insiders own a significant proportion of Hi-Trend Technology (Shanghai) Co., Ltd.. Insiders own CN¥972m worth of shares in the CN¥3.6b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hi-Trend Technology (Shanghai). 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 34%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Hi-Trend Technology (Shanghai) better, we need to consider many other factors. Be aware that Hi-Trend Technology (Shanghai) is showing 2 warning signs in our investment analysis , 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.

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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.