Shenzhen KSTAR Science and Technology Co., Ltd.'s (SZSE:002518) last week's 5.7% decline must have disappointed private companies who have a significant stake

Key Insights

• The considerable ownership by private companies in Shenzhen KSTAR Science and Technology indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Ningbo Kstar Venture Capital Partnership Enterprise (Limited Partnership) with a 57% stake
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Shenzhen KSTAR Science and Technology Co., Ltd. (SZSE:002518), then you'll have to look at the makeup of its share registry. With 57% stake, private companies 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¥9.9b last week, private companies would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Shenzhen KSTAR Science and Technology, beginning with the chart below.

See our latest analysis for Shenzhen KSTAR Science and Technology

What Does The Institutional Ownership Tell Us About Shenzhen KSTAR Science and Technology?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Shenzhen KSTAR Science and Technology. 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 Shenzhen KSTAR Science and Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Shenzhen KSTAR Science and Technology. Our data shows that Ningbo Kstar Venture Capital Partnership Enterprise (Limited Partnership) is the largest shareholder with 57% of shares outstanding. This implies that they have majority interest control of the future of the company. With 3.6% and 0.8% of the shares outstanding respectively, Ling Liu and Manulife Asset Management are the second and third largest shareholders. Ling Liu, who is the second-largest shareholder, also happens to hold the title of Chief Administrative Officer.

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

Insider Ownership Of Shenzhen KSTAR Science and Technology

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Shenzhen KSTAR Science and Technology Co., Ltd.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around CN¥391m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

With a 32% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shenzhen KSTAR Science and Technology. 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.

Private Company Ownership

It seems that Private Companies own 57%, of the Shenzhen KSTAR Science and Technology stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shenzhen KSTAR Science and Technology better, we need to consider many other factors. For instance, we've identified 2 warning signs for Shenzhen KSTAR Science and Technology (1 can't be ignored) that you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com