Shenzhen Yinghe Technology Co., Ltd's (SZSE:300457) market cap dropped CN¥3.2b last week; Public companies bore the brunt

Key Insights

• The considerable ownership by public companies in Shenzhen Yinghe Technology indicates that they collectively have a greater say in management and business strategy
• The top 2 shareholders own 57% of the company
• Insider ownership in Shenzhen Yinghe Technology is 19%

To get a sense of who is truly in control of Shenzhen Yinghe Technology Co., Ltd (SZSE:300457), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are public companies with 29% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to CN¥12b last week, public 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 Yinghe Technology, beginning with the chart below.

View 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 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. 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 Shenzhen Yinghe Technology's earnings history below. Of course, the future is what really matters.

Shenzhen Yinghe Technology is not owned by hedge funds. The company's largest shareholder is Shanghai Electric Group Co., Ltd., with ownership of 29%. In comparison, the second and third largest shareholders hold about 29% and 17% of the stock.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 Yinghe Technology

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our information suggests that insiders maintain a significant holding in Shenzhen Yinghe Technology Co., Ltd. It has a market capitalization of just CN¥12b, and insiders have CN¥2.3b 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

The general public, who are usually individual investors, hold a 18% stake in Shenzhen Yinghe Technology. 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

It seems that Private Companies own 29%, of the Shenzhen Yinghe 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.

Public Company Ownership

Public companies currently own 29% of Shenzhen Yinghe Technology stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for Shenzhen Yinghe Technology 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.