Sublime China Information Co., Ltd.'s (SZSE:301299) top holders are insiders and they are likely disappointed by the recent 12% drop

Key Insights

• Significant insider control over Sublime China Information implies vested interests in company growth
• A total of 5 investors have a majority stake in the company with 55% ownership
• Institutional ownership in Sublime China Information is 10%

To get a sense of who is truly in control of Sublime China Information Co., Ltd. (SZSE:301299), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 50% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 12% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Sublime China Information.

Check out our latest analysis for Sublime China Information

What Does The Institutional Ownership Tell Us About Sublime China Information?

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.

We can see that Sublime China Information does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Sublime China Information's historic earnings and revenue below, but keep in mind there's always more to the story.

Sublime China Information is not owned by hedge funds. Our data shows that Hulin Jiang is the largest shareholder with 24% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 7.7%, of the shares outstanding, respectively. Anquan Hou, who is the third-largest shareholder, also happens to hold the title of Chairman of Corporate Board. Furthermore, CEO Jun Cai is the owner of 1.5% of the company's shares.

Our research also brought to light the fact that roughly 55% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Sublime China Information

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 the majority of Sublime China Information Co., Ltd.. This means they can collectively make decisions for the company. Given it has a market cap of CN¥2.4b, that means they have CN¥1.2b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 29% 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 11%, 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:

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. Case in point: We've spotted 2 warning signs for Sublime China Information you should be aware of, and 1 of them doesn't sit too well with us.

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.

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