CEO Yong Li, Chengdu Qushui Science and Technology Co., Ltd.'s (SZSE:301336) largest shareholder sees value of holdings go down 13% after recent drop

Key Insights

• Chengdu Qushui Science and Technology's significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 64% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Chengdu Qushui Science and Technology Co., Ltd. (SZSE:301336), 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 64% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders as a group endured the highest losses after market cap fell by CN¥329m.

Let's take a closer look to see what the different types of shareholders can tell us about Chengdu Qushui Science and Technology.

See our latest analysis for Chengdu Qushui Science and Technology

What Does The Institutional Ownership Tell Us About Chengdu Qushui Science and Technology?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Chengdu Qushui Science and Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Chengdu Qushui Science and Technology's earnings history below. Of course, the future is what really matters.

Chengdu Qushui Science and Technology is not owned by hedge funds. With a 49% stake, CEO Yong Li is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 15% and 6.7%, of the shares outstanding, respectively. Interestingly, the second-largest shareholder, Liang Li is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 64% stake.

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 Chengdu Qushui Science and Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own the majority of Chengdu Qushui Science and Technology Co., Ltd.. This means they can collectively make decisions for the company. Given it has a market cap of CN¥2.2b, that means they have CN¥1.4b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 10% stake in the company, and hence can't easily be ignored. 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

Private equity firms hold a 6.7% stake in Chengdu Qushui Science and Technology. This suggests they can be influential in key policy decisions. 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 9.3%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Chengdu Qushui Science and Technology better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Chengdu Qushui Science and Technology (including 2 which don't sit too well with us) .

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.