Retail investors invested in Suzhou Planning & Design Research Institute Co.,Ltd. (SZSE:301505) copped the brunt of last week's CN¥312m market cap decline

Key Insights

• The considerable ownership by retail investors in Suzhou Planning & Design Research InstituteLtd indicates that they collectively have a greater say in management and business strategy
• 48% of the business is held by the top 25 shareholders
• Insider ownership in Suzhou Planning & Design Research InstituteLtd is 29%

Every investor in Suzhou Planning & Design Research Institute Co.,Ltd. (SZSE:301505) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 11% decrease in the stock price last week, retail investors suffered the most losses, but insiders who own 29% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Suzhou Planning & Design Research InstituteLtd.

Check out our latest analysis for Suzhou Planning & Design Research InstituteLtd

What Does The Institutional Ownership Tell Us About Suzhou Planning & Design Research InstituteLtd?

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.

Less than 5% of Suzhou Planning & Design Research InstituteLtd is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. 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 Suzhou Planning & Design Research InstituteLtd. Looking at our data, we can see that the largest shareholder is Feng Li with 9.0% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.5% and 5.3% of the stock. Furthermore, CEO Weidong Niu is the owner of 4.8% of the company's shares.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Suzhou Planning & Design Research InstituteLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own a reasonable proportion of Suzhou Planning & Design Research Institute Co.,Ltd.. Insiders own CN¥710m worth of shares in the CN¥2.4b company. 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, mostly comprising of individual investors, collectively holds 51% of Suzhou Planning & Design Research InstituteLtd shares. 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.

Private Equity Ownership

With a stake of 5.5%, private equity firms could influence the Suzhou Planning & Design Research InstituteLtd board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

It seems that Private Companies own 12%, of the Suzhou Planning & Design Research InstituteLtd 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 3 warning signs we've spotted with Suzhou Planning & Design Research InstituteLtd (including 2 which shouldn't be ignored) .

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com