Fujian Nebula Electronics Co., Ltd.'s (SZSE:300648) market cap dropped CN¥445m last week; Individual investors bore the brunt

Key Insights

• Significant control over Fujian Nebula Electronics by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 18 shareholders own 49% of the company
• 45% of Fujian Nebula Electronics is held by insiders

To get a sense of who is truly in control of Fujian Nebula Electronics Co., Ltd. (SZSE:300648), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 51% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders, who own 45% shares weren’t spared from last week’s CN¥445m market cap drop, individual investors as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of Fujian Nebula Electronics.

Check out our latest analysis for Fujian Nebula Electronics

What Does The Institutional Ownership Tell Us About Fujian Nebula Electronics?

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.

Since institutions own only a small portion of Fujian Nebula Electronics, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Fujian Nebula Electronics. The company's largest shareholder is You Cai Li, with ownership of 15%. Meanwhile, the second and third largest shareholders, hold 11% and 11%, of the shares outstanding, respectively. Interestingly, the bottom two of the top three shareholders also hold the title of Chief Executive Officer and Member of the Board of Directors, respectively, suggesting that these insiders have a personal stake in the company.

A deeper look at our ownership data shows that the top 18 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Fujian Nebula Electronics

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.

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 information suggests that insiders maintain a significant holding in Fujian Nebula Electronics Co., Ltd.. Insiders own CN¥1.1b worth of shares in the CN¥2.6b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public -- including retail investors -- own 51% of Fujian Nebula Electronics. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Fujian Nebula Electronics , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.