Sichuan Chuanhuan Technology Co.,Ltd.'s (SZSE:300547) last week's 9.7% decline must have disappointed individual investors who have a significant stake

Key Insights

• Sichuan Chuanhuan TechnologyLtd's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 41% of the business is held by the top 25 shareholders
• Insider ownership in Sichuan Chuanhuan TechnologyLtd is 34%

A look at the shareholders of Sichuan Chuanhuan Technology Co.,Ltd. (SZSE:300547) can tell us which group is most powerful. With 59% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders who own 34% came under pressure after market cap dropped to CN¥4.0b last week,individual investors took the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Sichuan Chuanhuan TechnologyLtd.

View our latest analysis for Sichuan Chuanhuan TechnologyLtd

What Does The Institutional Ownership Tell Us About Sichuan Chuanhuan TechnologyLtd?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Sichuan Chuanhuan TechnologyLtd. 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. 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 Sichuan Chuanhuan TechnologyLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Sichuan Chuanhuan TechnologyLtd is not owned by hedge funds. The company's largest shareholder is Qichao Wen, with ownership of 14%. With 11% and 7.3% of the shares outstanding respectively, Jian Wen and Jisheng Wang are the second and third largest shareholders.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Sichuan Chuanhuan TechnologyLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

Our most recent data indicates that insiders own a reasonable proportion of Sichuan Chuanhuan Technology Co.,Ltd.. Insiders own CN¥1.3b worth of shares in the CN¥4.0b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 59% of Sichuan Chuanhuan TechnologyLtd. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sichuan Chuanhuan TechnologyLtd better, we need to consider many other factors. Be aware that Sichuan Chuanhuan TechnologyLtd is showing 3 warning signs in our investment analysis , you should know about...

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.