Individual investors invested in Sungrow Power Supply Co., Ltd. (SZSE:300274) copped the brunt of last week's CN¥8.7b market cap decline

Key Insights

• Significant control over Sungrow Power Supply by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 24 shareholders own 50% of the company
• Insider ownership in Sungrow Power Supply is 32%

If you want to know who really controls Sungrow Power Supply Co., Ltd. (SZSE:300274), then you'll have to look at the makeup of its share registry. With 41% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of individual investors took a hit after last week’s 5.2% price drop, insiders with their 32% also suffered.

In the chart below, we zoom in on the different ownership groups of Sungrow Power Supply.

View our latest analysis for Sungrow Power Supply

What Does The Institutional Ownership Tell Us About Sungrow Power Supply?

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 Sungrow Power Supply. 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 Sungrow Power Supply'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 Sungrow Power Supply. The company's CEO Ren Xian Cao is the largest shareholder with 31% of shares outstanding. With 2.8% and 2.0% of the shares outstanding respectively, Hefei Huizhuo Equity Investment Partnership Enterprise (Limited Partnership) and China Asset Management Co. Ltd. are the second and third largest shareholders.

A closer look at our ownership figures suggests that the top 24 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 Sungrow Power Supply

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own a reasonable proportion of Sungrow Power Supply Co., Ltd.. It has a market capitalization of just CN¥157b, and insiders have CN¥51b worth of shares in their own names. That's quite significant. 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 41% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sungrow Power Supply. 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 3.5%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Sungrow Power Supply better, we need to consider many other factors. Be aware that Sungrow Power Supply is showing 3 warning signs in our investment analysis , and 1 of those is significant...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.