Retail investors among Runjian Co., Ltd.'s (SZSE:002929) largest stockholders and were hit after last week's 8.3% price drop

Key Insights

• Runjian's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 52% of the business is held by the top 3 shareholders
• Insider ownership in Runjian is 33%

To get a sense of who is truly in control of Runjian Co., Ltd. (SZSE:002929), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 39% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 8.3% decrease in the stock price last week, retail investors suffered the most losses, but insiders who own 33% stock also took a hit.

Let's delve deeper into each type of owner of Runjian, beginning with the chart below.

View our latest analysis for Runjian

What Does The Institutional Ownership Tell Us About Runjian?

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.

Runjian 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. 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 Runjian's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Runjian. Our data shows that Jianguo Li is the largest shareholder with 30% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 19% and 3.6%, of the shares outstanding, respectively. Additionally, the company's CEO Wenjie Xu directly holds 1.6% of the total shares outstanding.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Runjian

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 Runjian Co., Ltd.. Insiders own CN¥2.7b worth of shares in the CN¥8.1b 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

With a 39% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Runjian. 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

Our data indicates that Private Companies hold 19%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Runjian better, we need to consider many other factors. For instance, we've identified 3 warning signs for Runjian (1 is a bit unpleasant) 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.