Sichuan Shudao Equipment & Technology Co.,Ltd.'s (SZSE:300540) largest shareholders are retail investors who were rewarded as market cap surged CN¥379m last week

Key Insights

• The considerable ownership by retail investors in Sichuan Shudao Equipment & TechnologyLtd indicates that they collectively have a greater say in management and business strategy
• A total of 6 investors have a majority stake in the company with 50% ownership
• Insider ownership in Sichuan Shudao Equipment & TechnologyLtd is 19%

To get a sense of who is truly in control of Sichuan Shudao Equipment & Technology Co.,Ltd. (SZSE:300540), it is important to understand the ownership structure of the business. With 38% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, retail investors benefitted the most after the company's market cap rose by CN¥379m last week.

Let's delve deeper into each type of owner of Sichuan Shudao Equipment & TechnologyLtd, beginning with the chart below.

View our latest analysis for Sichuan Shudao Equipment & TechnologyLtd

What Does The Institutional Ownership Tell Us About Sichuan Shudao Equipment & TechnologyLtd?

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.

As you can see, institutional investors have a fair amount of stake in Sichuan Shudao Equipment & TechnologyLtd. 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. 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 Sichuan Shudao Equipment & TechnologyLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Sichuan Shudao Equipment & TechnologyLtd is not owned by hedge funds. Shudao Transport Services Group Co., Ltd. is currently the largest shareholder, with 29% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.3% and 5.9% of the stock. Le Min Xie, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Sichuan Shudao Equipment & TechnologyLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

It seems insiders own a significant proportion of Sichuan Shudao Equipment & Technology Co.,Ltd.. Insiders have a CN¥815m stake in this CN¥4.2b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 38% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 35%, of the company's shares. 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 Sichuan Shudao Equipment & TechnologyLtd better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Sichuan Shudao Equipment & TechnologyLtd .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.