Bestechnic (Shanghai) Co., Ltd. (SHSE:688608)’s 11% gain last week was beneficial for both retail investors who own 30% of the stock and insiders

Key insights

  • The significant ownership of private investors in Bestechnic (Shanghai) indicates that they collectively have a greater say in management and corporate strategy
  • The 12 largest shareholders own 51% of the company
  • Insiders own 26% of Bestechnic (Shanghai)

If you want to know who really controls Bestechnic (Shanghai) Co., Ltd. (SHSE:688608), you’ll have to look at the makeup of the share register. With a 30% stake, retail investors own the most shares in the company. In other words, the group has the most upside potential (or downside risk).

Retail investors benefited the most after the market capitalization hit CN¥21 billion last week, while insiders holding 26% also benefited.

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

View our latest analysis for Bestechnic (Shanghai)

division of property
SHSE:688608 Ownership Distribution July 21, 2024

What does institutional ownership tell us about Bestechnic (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 is included in a major index. We would expect most companies to have a number of institutions on the register, especially if they are growing.

We can see that Bestechnic (Shanghai) has institutional investors; and they own a large portion of the company’s shares. This implies that the analysts working for those institutions have looked at the stock and they like it. But like everyone else, they can be wrong. It is not uncommon to see a large drop in the share price if two large institutional investors try to get rid of a stock at the same time. So it is worth taking a look at the past earnings performance of Bestechnic (Shanghai) (see below). Of course, keep in mind that there are other factors to consider as well.

profit and sales growth
SHSE:688608 Earnings and Revenue Growth July 21, 2024

Bestechnic (Shanghai) is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In the case of Bestechnic (Shanghai), the head of Corporate Communications, Xiaodong Tang, is the largest shareholder, with 11% of the outstanding shares. In comparison, the second and third largest shareholders own around 10% and 8.7% of the shares. Interestingly, the second largest shareholder, Guoguang Zhao, is also the Chief Executive Officer, again pointing to strong insider ownership among the company’s major shareholders.

If we look at the shareholder register, we see that 51% of the ownership is in the hands of the 12 largest shareholders. This means that no single shareholder has a majority interest in the ownership.

Researching institutional ownership is a good way to gauge and filter the expected performance of a stock. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth checking out what they are predicting.

Insider owned by Bestechnic (Shanghai)

The definition of an insider can vary slightly from country to country, but members of the board of directors always count. A company’s management runs the business, but the CEO will answer to the board, even if he or she is a member of it.

Most people consider insider ownership a positive because it can indicate that the board is well aligned with other shareholders. Sometimes, however, too much power is concentrated within this group.

Our most recent data indicates that insiders own a fair amount of Bestechnic (Shanghai) Co., Ltd. It is very interesting to see that insiders have a significant CN¥5.3b stake in this CN¥21b company. Most would be happy to see the board of directors investing alongside them. You can check this free chart of recent insider trades.

General public property

With a 30% ownership percentage, the general public, consisting mainly of individual investors, has some influence on Bestechnic (Shanghai). Although this size of ownership may not be enough to sway a policy decision in their favor, they can still have a collective impact on company policy.

Private Equity Ownership

With an ownership of 8.7%, private equity firms are able to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stay for the long term, but generally they have a shorter investment horizon and — as the name suggests — they don’t invest much in listed companies. Over time, they may want to sell capital and reinvest elsewhere.

Owned by a private company

We can see that Private Companies own 12% of the issued shares. It may be worth looking into this further. If related parties, such as insiders, have an interest in one of these private companies, this should be disclosed in the annual report. Private companies can also have a strategic interest in the company.

Next steps:

I find it very interesting to look at who exactly owns a company, but to really get insight, we also need to consider other information.

Many find it useful to take an in-depth look at how a company has performed in the past. You can use this detailed graph of previous profits, revenues and cash flows.

But eventually it’s the futureIt is not the past that will determine how well the owners of this company will do. That is why we think you should take a look at this free report showing whether analysts are predicting a brighter future.

NB: The figures in this article have been calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month in which the financial statement is dated. This may not correspond to the figures in the full annual report.

Valuation is complex, but we make it simple.

Find out if Best Technology (Shanghai) may be over or undervalued by looking at our comprehensive analysis, which includes the following fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the free analysis

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This article from Simply Wall St is general in nature. We comment solely on historical data and analyst forecasts, using an objective methodology. Our articles are not intended as financial advice. It does not constitute a recommendation to buy or sell any shares and does not take into account your objectives or financial situation. We aim to provide you with a long-term analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in the shares mentioned.

Valuation is complex, but we make it simple.

Find out if Best Technology (Shanghai) may be over or undervalued by looking at our comprehensive analysis, which includes the following fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the free analysis

Do you have feedback on this article? Are you concerned about the content? Please contact us directly. You can also send an email to [email protected]