Key Insights

• The considerable ownership by individual investors in Bestechnic (Shanghai) indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 12 shareholders
• Insiders own 26% of Bestechnic (Shanghai)

If you want to know who really controls Bestechnic (Shanghai) Co., Ltd. (SHSE:688608), 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 individual investors with 29% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders who own 26% came under pressure after market cap dropped to CN¥38b last week,individual investors took the most losses.

In the chart below, we zoom in on the different ownership groups of Bestechnic (Shanghai).

What Does The Institutional Ownership Tell Us About Bestechnic (Shanghai)?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Bestechnic (Shanghai) 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 Bestechnic (Shanghai)'s historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Bestechnic (Shanghai). Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Bestechnic (Shanghai)'s case, its Head of Corporate Communications, Xiaodong Tang, is the largest shareholder, holding 11% of shares outstanding. For context, the second largest shareholder holds about 10% of the shares outstanding, followed by an ownership of 8.7% by the third-largest shareholder. Interestingly, the second-largest shareholder, Guoguang Zhao is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 12 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Bestechnic (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.

Our information suggests that insiders maintain a significant holding in Bestechnic (Shanghai) Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥9.8b stake in this CN¥38b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 29% stake in Bestechnic (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 Equity Ownership

Private equity firms hold a 8.7% stake in Bestechnic (Shanghai). This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

It seems that Private Companies own 12%, of the Bestechnic (Shanghai) stock. 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 Bestechnic (Shanghai) better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Bestechnic (Shanghai) .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.