Key Insights

• The considerable ownership by individual investors in New Huadu Technology indicates that they collectively have a greater say in management and business strategy
• 53% of the business is held by the top 6 shareholders
• Insiders own 27% of New Huadu Technology

Every investor in New Huadu Technology Co., Ltd. (SZSE:002264) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 35% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 25% increase in the stock price last week, individual investors profited the most, but insiders who own 27% stock also stood to gain from the increase.

Let's delve deeper into each type of owner of New Huadu Technology, beginning with the chart below.

What Does The Institutional Ownership Tell Us About New Huadu 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.

As you can see, institutional investors have a fair amount of stake in New Huadu Technology. 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 New Huadu Technology's earnings history below. Of course, the future is what really matters.

New Huadu Technology is not owned by hedge funds. The company's largest shareholder is New Huadu Industrial Group Co., Ltd., with ownership of 18%. With 12% and 8.2% of the shares outstanding respectively, Guo Tao Ni and Fashu Chen are the second and third largest shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of New Huadu Technology

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.

Our information suggests that insiders maintain a significant holding in New Huadu Technology Co., Ltd.. It has a market capitalization of just CN¥4.2b, and insiders have CN¥1.1b worth of shares in their own names. 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

The general public, who are usually individual investors, hold a 35% stake in New Huadu Technology. 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

It seems that Private Companies own 24%, of the New Huadu 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.

Public Company Ownership

It appears to us that public companies own 4.8% of New Huadu Technology. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand New Huadu Technology better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with New Huadu Technology .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.