Retail investors are Dongguan Kingsun Optoelectronic Co.,Ltd.'s (SZSE:002638) biggest owners and were hit after market cap dropped CN¥376m

Key Insights

• The considerable ownership by retail investors in Dongguan Kingsun OptoelectronicLtd indicates that they collectively have a greater say in management and business strategy
• The top 6 shareholders own 54% of the company
• 26% of Dongguan Kingsun OptoelectronicLtd is held by insiders

If you want to know who really controls Dongguan Kingsun Optoelectronic Co.,Ltd. (SZSE:002638), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 34% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As market cap fell to CN¥3.1b last week, retail investors 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 Dongguan Kingsun OptoelectronicLtd.

See our latest analysis for Dongguan Kingsun OptoelectronicLtd

What Does The Institutional Ownership Tell Us About Dongguan Kingsun OptoelectronicLtd?

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.

Dongguan Kingsun OptoelectronicLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Dongguan Kingsun OptoelectronicLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Dongguan Kingsun OptoelectronicLtd is not owned by hedge funds. Our data shows that Kingsun Enterprises Group Co., Ltd is the largest shareholder with 18% of shares outstanding. In comparison, the second and third largest shareholders hold about 12% and 7.6% of the stock. In addition, we found that Jin Cheng Liang, the CEO has 0.6% of the shares allocated to their name.

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 studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Dongguan Kingsun OptoelectronicLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 Dongguan Kingsun Optoelectronic Co.,Ltd.. Insiders own CN¥800m worth of shares in the CN¥3.1b 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

With a 34% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Dongguan Kingsun OptoelectronicLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 29%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Dongguan Kingsun OptoelectronicLtd is showing 2 warning signs in our investment analysis , you should know about...

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.