Key Insights

• Significant control over Hangzhou Honghua Digital Technology Stock by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 5 shareholders own 51% of the company
• Institutions own 23% of Hangzhou Honghua Digital Technology Stock

If you want to know who really controls Hangzhou Honghua Digital Technology Stock Company LTD. (SHSE:688789), 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. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 23% shares weren't spared from last week's CN¥495m market cap drop, private companies as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of Hangzhou Honghua Digital Technology Stock.

What Does The Institutional Ownership Tell Us About Hangzhou Honghua Digital Technology Stock?

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 Hangzhou Honghua Digital Technology Stock 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. 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 Hangzhou Honghua Digital Technology Stock's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Hangzhou Honghua Digital Technology Stock. Ningbo Weixin Business Management Partnership Enterprise (Limited Partnership) is currently the largest shareholder, with 14% of shares outstanding. In comparison, the second and third largest shareholders hold about 12% and 9.7% of the stock.

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.

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 Hangzhou Honghua Digital Technology Stock

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.

Shareholders would probably be interested to learn that insiders own shares in Hangzhou Honghua Digital Technology Stock Company LTD.. This is a big company, so it is good to see this level of alignment. Insiders own CN¥1.1b worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 21% stake in Hangzhou Honghua Digital Technology Stock. 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

Our data indicates that Private Companies hold 34%, of the company's shares. 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

We can see that public companies hold 9.4% of the Hangzhou Honghua Digital Technology Stock shares on issue. 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:

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. For instance, we've identified 2 warning signs for Hangzhou Honghua Digital Technology Stock (1 is a bit unpleasant) that you should be aware of.

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.