Individual investors are Suncha Technology Co., Ltd.'s (SZSE:001211) biggest owners and were hit after market cap dropped CN¥174m

Key Insights

• Significant control over Suncha Technology by individual investors implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 4 shareholders
• Insiders own 14% of Suncha Technology

To get a sense of who is truly in control of Suncha Technology Co., Ltd. (SZSE:001211), 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 38% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

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

In the chart below, we zoom in on the different ownership groups of Suncha Technology.

See our latest analysis for Suncha Technology

What Does The Institutional Ownership Tell Us About Suncha Technology?

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.

As you can see, institutional investors have a fair amount of stake in Suncha Technology. 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. 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 Suncha Technology's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Suncha Technology. Zhejiang Tianjun Investment Co., Ltd. is currently the largest shareholder, with 33% of shares outstanding. With 6.5% and 6.4% of the shares outstanding respectively, Sinowisdom Capital and Chenglie Zheng are the second and third largest shareholders. Chenglie Zheng, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Suncha Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

Our information suggests that insiders maintain a significant holding in Suncha Technology Co., Ltd.. Insiders own CN¥195m worth of shares in the CN¥1.4b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. 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 38% stake in Suncha Technology. 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 Equity Ownership

With a stake of 6.5%, private equity firms could influence the Suncha Technology 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

Our data indicates that Private Companies hold 33%, 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. Be aware that Suncha Technology is showing 3 warning signs in our investment analysis , you should know about...

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.