The recent 15% gain must have brightened CEO Weimin Kang's week, Harbin Xinguang Optic-Electronics Technology Co.,Ltd.'s (SHSE:688011) most bullish insider

Key Insights

• Harbin Xinguang Optic-Electronics TechnologyLtd's significant insider ownership suggests inherent interests in company's expansion
• Weimin Kang owns 51% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Harbin Xinguang Optic-Electronics Technology Co.,Ltd. (SHSE:688011) should be aware of the most powerful shareholder groups. With 57% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by CN¥170m last week.

Let's delve deeper into each type of owner of Harbin Xinguang Optic-Electronics TechnologyLtd, beginning with the chart below.

View our latest analysis for Harbin Xinguang Optic-Electronics TechnologyLtd

What Does The Institutional Ownership Tell Us About Harbin Xinguang Optic-Electronics TechnologyLtd?

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.

Harbin Xinguang Optic-Electronics TechnologyLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Harbin Xinguang Optic-Electronics TechnologyLtd'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 Harbin Xinguang Optic-Electronics TechnologyLtd. Looking at our data, we can see that the largest shareholder is the CEO Weimin Kang with 51% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. Lixin Kang is the second largest shareholder owning 5.7% of common stock, and Harbin Keli Venture Capital Management Co., Ltd. holds about 3.6% of the company stock.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Harbin Xinguang Optic-Electronics TechnologyLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems that insiders own more than half the Harbin Xinguang Optic-Electronics Technology Co.,Ltd. stock. This gives them a lot of power. Given it has a market cap of CN¥1.3b, that means they have CN¥756m worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Harbin Xinguang Optic-Electronics TechnologyLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Harbin Xinguang Optic-Electronics TechnologyLtd better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Harbin Xinguang Optic-Electronics TechnologyLtd you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.