Individual investors invested in Shenzhen China Bicycle Company (Holdings) Limited (SZSE:000017) copped the brunt of last week's CN¥462m market cap decline

Key Insights

• The considerable ownership by individual investors in Shenzhen China Bicycle Company (Holdings) indicates that they collectively have a greater say in management and business strategy
• 42% of the business is held by the top 15 shareholders
• Institutional ownership in Shenzhen China Bicycle Company (Holdings) is 11%

Every investor in Shenzhen China Bicycle Company (Holdings) Limited (SZSE:000017) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 58% 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.

And last week, individual investors endured the biggest losses as the stock fell by 11%.

Let's delve deeper into each type of owner of Shenzhen China Bicycle Company (Holdings), beginning with the chart below.

View our latest analysis for Shenzhen China Bicycle Company (Holdings)

What Does The Institutional Ownership Tell Us About Shenzhen China Bicycle Company (Holdings)?

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.

As you can see, institutional investors have a fair amount of stake in Shenzhen China Bicycle Company (Holdings). This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Shenzhen China Bicycle Company (Holdings), (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Shenzhen China Bicycle Company (Holdings). Looking at our data, we can see that the largest shareholder is Wansheng Industrial Holdings (Shenzhen) Co., Ltd. with 20% of shares outstanding. Shenzhen Guomin Investment Development Co., Ltd. is the second largest shareholder owning 9.2% of common stock, and UOB-Kay Hian Holdings Limited, Asset Management Arm holds about 5.9% of the company stock.

Our studies suggest that the top 15 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 Shenzhen China Bicycle Company (Holdings)

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

We can report that insiders do own shares in Shenzhen China Bicycle Company (Holdings) Limited. In their own names, insiders own CN¥39m worth of stock in the CN¥2.8b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 58% stake in Shenzhen China Bicycle Company (Holdings), suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

Our data indicates that Private Companies hold 30%, of the company's shares. 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.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

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