Shenzhen Yinghe Technology Co., Ltd's (SZSE:300457) last week's 5.0% decline must have disappointed retail investors who have a significant stake

Key Insights

• The considerable ownership by retail investors in Shenzhen Yinghe Technology indicates that they collectively have a greater say in management and business strategy
• A total of 4 investors have a majority stake in the company with 50% ownership
• Insiders own 19% of Shenzhen Yinghe Technology

A look at the shareholders of Shenzhen Yinghe Technology Co., Ltd (SZSE:300457) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 43% 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¥10b 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 Shenzhen Yinghe Technology.

See our latest analysis for Shenzhen Yinghe Technology

What Does The Institutional Ownership Tell Us About Shenzhen Yinghe Technology?

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.

Shenzhen Yinghe Technology 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. 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 Shenzhen Yinghe Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

Shenzhen Yinghe Technology is not owned by hedge funds. Shanghai Electric Holdings Group Co., Ltd. is currently the largest shareholder, with 29% of shares outstanding. In comparison, the second and third largest shareholders hold about 17% and 2.6% of the stock.

Our research also brought to light the fact that roughly 50% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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 Shenzhen Yinghe Technology

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 information suggests that insiders maintain a significant holding in Shenzhen Yinghe Technology Co., Ltd. It has a market capitalization of just CN¥10b, and insiders have CN¥2.0b 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 43% stake in the company, and hence can't easily be ignored. 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

We can see that Private Companies own 29%, of the shares on issue. 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 Yinghe Technology better, we need to consider many other factors. For example, we've discovered 1 warning sign for Shenzhen Yinghe Technology that you should be aware of before investing here.

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.