GL-Carlink Technology Holding Limited (HKG:2531) Top Key Executive Lei Zhu, the company's largest shareholder sees 9.0%reduction in holdings value

Key Insights

• GL-Carlink Technology Holding's significant insider ownership suggests inherent interests in company's expansion
• The top 3 shareholders own 56% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of GL-Carlink Technology Holding Limited (HKG:2531), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 51% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders as a group endured the highest losses after market cap fell by HK$1.3b.

In the chart below, we zoom in on the different ownership groups of GL-Carlink Technology Holding.

Check out our latest analysis for GL-Carlink Technology Holding

What Does The Institutional Ownership Tell Us About GL-Carlink Technology Holding?

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.

Institutions have a very small stake in GL-Carlink Technology Holding. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

GL-Carlink Technology Holding 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 GL-Carlink Technology Holding's case, its Top Key Executive, Lei Zhu, is the largest shareholder, holding 42% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.5% and 7.1% of the stock. Interestingly, the third-largest shareholder, Zhongyong Jiang is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders. In addition, we found that Zhan Zhao, the CEO has 2.5% of the shares allocated to their name.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 GL-Carlink Technology Holding

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own the majority of GL-Carlink Technology Holding Limited. This means they can collectively make decisions for the company. Given it has a market cap of HK$13b, that means insiders have a whopping HK$6.8b worth of shares in their own names. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in GL-Carlink Technology Holding. 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

We can see that Private Companies own 6.7%, of the shares on issue. 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.

Public Company Ownership

Public companies currently own 7.5% of GL-Carlink Technology Holding stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand GL-Carlink Technology Holding better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for GL-Carlink Technology Holding 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.