Retail investors are SolaX Power Network Technology (Zhejiang) Co., Ltd.'s (SHSE:688717) biggest owners and were hit after market cap dropped CN¥478m

Key Insights

• The considerable ownership by retail investors in SolaX Power Network Technology (Zhejiang) indicates that they collectively have a greater say in management and business strategy
• The top 6 shareholders own 50% of the company
• 35% of SolaX Power Network Technology (Zhejiang) is held by insiders

A look at the shareholders of SolaX Power Network Technology (Zhejiang) Co., Ltd. (SHSE:688717) can tell us which group is most powerful. The group holding the most number of shares in the company, around 38% to be precise, is retail investors. 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 35% shares weren’t spared from last week’s CN¥478m market cap drop, retail investors as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of SolaX Power Network Technology (Zhejiang).

See our latest analysis for SolaX Power Network Technology (Zhejiang)

What Does The Institutional Ownership Tell Us About SolaX Power Network Technology (Zhejiang)?

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.

We can see that SolaX Power Network Technology (Zhejiang) does have institutional investors; and they hold a good portion of the company's stock. 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. 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 SolaX Power Network Technology (Zhejiang)'s historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in SolaX Power Network Technology (Zhejiang). Looking at our data, we can see that the largest shareholder is the CEO Xinfu Li with 19% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 16% and 5.5%, of the shares outstanding, respectively.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of SolaX Power Network Technology (Zhejiang)

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 information suggests that insiders maintain a significant holding in SolaX Power Network Technology (Zhejiang) Co., Ltd.. It has a market capitalization of just CN¥7.3b, and insiders have CN¥2.6b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public-- including retail investors -- own 38% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With an ownership of 5.5%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for SolaX Power Network Technology (Zhejiang) you should be aware of.

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.