Shanghai Rychen Technologies Co., Ltd.'s (SZSE:301273) stock price dropped 17% last week; private companies would not be happy

Key Insights

• Shanghai Rychen Technologies' significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 53% of the business is held by the top 3 shareholders
• Insider ownership in Shanghai Rychen Technologies is 31%

A look at the shareholders of Shanghai Rychen Technologies Co., Ltd. (SZSE:301273) can tell us which group is most powerful. With 35% stake, private companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of private companies took a hit after last week’s 17% price drop, insiders with their 31% also suffered.

Let's delve deeper into each type of owner of Shanghai Rychen Technologies, beginning with the chart below.

Check out our latest analysis for Shanghai Rychen Technologies

What Does The Institutional Ownership Tell Us About Shanghai Rychen Technologies?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Shanghai Rychen Technologies does have institutional investors; and they hold a good portion of the company's stock. 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 Shanghai Rychen Technologies' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Shanghai Rychen Technologies. With a 31% stake, CEO Wandong Chen is the largest shareholder. Shanghai Xinpu Investment Management Partnership Enterprise (Limited Partnership) is the second largest shareholder owning 15% of common stock, and Ningbo Juchen Fanrong Investment Management Partnership Enterprise (Limited Partnership) holds about 7.4% of the company stock.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.

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

Insider Ownership Of Shanghai Rychen Technologies

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Shanghai Rychen Technologies Co., Ltd.. Insiders have a CN¥384m stake in this CN¥1.2b business. 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

With a 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shanghai Rychen Technologies. 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 35%, 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:

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. For instance, we've identified 2 warning signs for Shanghai Rychen Technologies that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.