The recent CN¥180m market cap decrease is likely to have disappointed insiders invested in Nanjing CIGU Technology Corp.,LTD. (SHSE:688448)

Key Insights

• Insiders appear to have a vested interest in Nanjing CIGU TechnologyLTD's growth, as seen by their sizeable ownership
• 52% of the business is held by the top 4 shareholders
• 14% of Nanjing CIGU TechnologyLTD is held by Institutions

A look at the shareholders of Nanjing CIGU Technology Corp.,LTD. (SHSE:688448) can tell us which group is most powerful. With 54% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥1.3b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Nanjing CIGU TechnologyLTD.

View our latest analysis for Nanjing CIGU TechnologyLTD

What Does The Institutional Ownership Tell Us About Nanjing CIGU TechnologyLTD?

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.

Nanjing CIGU TechnologyLTD already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Nanjing CIGU TechnologyLTD, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Nanjing CIGU TechnologyLTD. Our data shows that Lihua Wu is the largest shareholder with 18% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 16% and 11%, of the shares outstanding, respectively. Ningchen Wu, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive. Additionally, the company's CEO Jiyong Dong directly holds 3.4% of the total shares outstanding.

On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Nanjing CIGU TechnologyLTD

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.

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 information suggests that insiders own more than half of Nanjing CIGU Technology Corp.,LTD.. This gives them effective control of the company. That means they own CN¥682m worth of shares in the CN¥1.3b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 20% stake in Nanjing CIGU TechnologyLTD. 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 11%, of the Nanjing CIGU TechnologyLTD stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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 Nanjing CIGU TechnologyLTD (1 can't be ignored!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.