Individual investors invested in Suzhou Electrical Apparatus Science Academy Co., Ltd. (SZSE:300215) copped the brunt of last week's CN¥547m market cap decline

Key Insights

• Significant control over Suzhou Electrical Apparatus Science Academy by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 59% of the company
• Insiders own 34% of Suzhou Electrical Apparatus Science Academy

To get a sense of who is truly in control of Suzhou Electrical Apparatus Science Academy Co., Ltd. (SZSE:300215), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 36% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 11% decrease in the stock price last week, individual investors suffered the most losses, but insiders who own 34% stock also took a hit.

Let's delve deeper into each type of owner of Suzhou Electrical Apparatus Science Academy, beginning with the chart below.

Check out our latest analysis for Suzhou Electrical Apparatus Science Academy

What Does The Institutional Ownership Tell Us About Suzhou Electrical Apparatus Science Academy?

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.

Institutions have a very small stake in Suzhou Electrical Apparatus Science Academy. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in Suzhou Electrical Apparatus Science Academy. The company's largest shareholder is Chun Hu, with ownership of 33%. Meanwhile, the second and third largest shareholders, hold 25% and 1.0%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Suzhou Electrical Apparatus Science Academy

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of Suzhou Electrical Apparatus Science Academy Co., Ltd.. It has a market capitalization of just CN¥4.2b, and insiders have CN¥1.5b worth of shares in their own names. 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, who are usually individual investors, hold a 36% stake in Suzhou Electrical Apparatus Science Academy. 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

Our data indicates that Private Companies hold 26%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private 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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Suzhou Electrical Apparatus Science Academy (at least 2 which can't be ignored) , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. So take a peek at this free 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.

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