Shanghai CEO Environmental Protection Technology Co., Ltd's (SHSE:688335) market cap dropped CN¥156m last week; Individual investors bore the brunt

Key Insights

• The considerable ownership by individual investors in Shanghai CEO Environmental Protection Technology indicates that they collectively have a greater say in management and business strategy
• 53% of the business is held by the top 7 shareholders
• 26% of Shanghai CEO Environmental Protection Technology is held by insiders

A look at the shareholders of Shanghai CEO Environmental Protection Technology Co., Ltd (SHSE:688335) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 32% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders, who own 26% shares weren’t spared from last week’s CN¥156m market cap drop, individual investors as a group suffered the maximum losses

Let's delve deeper into each type of owner of Shanghai CEO Environmental Protection Technology, beginning with the chart below.

See our latest analysis for Shanghai CEO Environmental Protection Technology

What Does The Institutional Ownership Tell Us About Shanghai CEO Environmental Protection Technology?

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.

As you can see, institutional investors have a fair amount of stake in Shanghai CEO Environmental Protection Technology. 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 Shanghai CEO Environmental Protection Technology's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Shanghai CEO Environmental Protection Technology. The company's largest shareholder is Wenjun Huang, with ownership of 17%. Meanwhile, the second and third largest shareholders, hold 9.3% and 5.7%, of the shares outstanding, respectively.

We did some more digging and found that 7 of the top shareholders account for roughly 53% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 Shanghai CEO Environmental Protection Technology

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 information suggests that insiders maintain a significant holding in Shanghai CEO Environmental Protection Technology Co., Ltd. Insiders own CN¥364m worth of shares in the CN¥1.4b 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 32% stake in the company, and hence can't easily be ignored. 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 Equity Ownership

With a stake of 15%, private equity firms could influence the Shanghai CEO Environmental Protection Technology board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

We can see that Private Companies own 14%, 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.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 2 warning signs for Shanghai CEO Environmental Protection Technology (1 doesn't sit too well with us!) that you should be aware of before investing here.

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.