Private companies among Powerwin Tech Group Limited's (HKG:2405) largest stockholders and were hit after last week's 12% price drop

Key Insights

• The considerable ownership by private companies in Powerwin Tech Group indicates that they collectively have a greater say in management and business strategy
• The top 2 shareholders own 56% of the company
• Insiders own 23% of Powerwin Tech Group

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

A look at the shareholders of Powerwin Tech Group Limited (HKG:2405) can tell us which group is most powerful. We can see that private companies own the lion's share in the company with 44% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 12% decline in share price, private companies suffered the most losses.

Let's delve deeper into each type of owner of Powerwin Tech Group, beginning with the chart below.

Check out our latest analysis for Powerwin Tech Group

What Does The Lack Of Institutional Ownership Tell Us About Powerwin Tech Group?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Powerwin Tech Group, for yourself, below.

Powerwin Tech Group is not owned by hedge funds. The company's largest shareholder is Common Excellence International Group Limited, with ownership of 44%. With 12% and 10.0% of the shares outstanding respectively, Xiang Rong Li and Xiang Li are the second and third largest shareholders. Xiang Li, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Powerwin Tech Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Powerwin Tech Group Limited. Insiders have a HK$433m stake in this HK$1.9b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 33% stake in Powerwin Tech Group. 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 Company Ownership

It seems that Private Companies own 44%, of the Powerwin Tech Group 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Powerwin Tech Group better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Powerwin Tech Group (at least 3 which don't sit too well with us) , and understanding them should be part of your investment process.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.