Flat Glass Group Co., Ltd. (HKG:6865) CEO Hongliang Ruan's holdings dropped 4.1% in value as a result of the recent pullback

Key Insights

• Flat Glass Group's significant insider ownership suggests inherent interests in company's expansion
• A total of 4 investors have a majority stake in the company with 50% ownership
• Institutions own 25% of Flat Glass Group

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To get a sense of who is truly in control of Flat Glass Group Co., Ltd. (HKG:6865), it is important to understand the ownership structure of the business. With 56% stake, individual insiders possess the maximum shares in the company. 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$978m.

In the chart below, we zoom in on the different ownership groups of Flat Glass Group.

View our latest analysis for Flat Glass Group

What Does The Institutional Ownership Tell Us About Flat Glass Group?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Flat Glass Group does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Flat Glass Group's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Flat Glass Group. Looking at our data, we can see that the largest shareholder is the CEO Hongliang Ruan with 20% of shares outstanding. Zeyun Ruan is the second largest shareholder owning 15% of common stock, and Jinhua Jiang holds about 13% of the company stock. Interestingly, the second and third-largest shareholders also happen to be the President and Vice Chairman, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 4 shareholders control more than half of the company's shares which essentially means that there is concentrated ownership amongst the top shareholders, most of whom happen to be insiders!

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Flat Glass Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Flat Glass Group Co., Ltd. stock. This gives them a lot of power. Insiders own HK$21b worth of shares in the HK$37b company. That's extraordinary! 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

With a 18% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Flat Glass Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 3 warning signs we've spotted with Flat Glass Group (including 1 which makes us a bit uncomfortable) .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.