Songcheng Performance Development Co.,Ltd's (SZSE:300144) market cap dropped CN¥1.8b last week; Individual investors bore the brunt

Key Insights

• Significant control over Songcheng Performance DevelopmentLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 7 shareholders own 51% of the company
• 15% of Songcheng Performance DevelopmentLtd is held by insiders

To get a sense of who is truly in control of Songcheng Performance Development Co.,Ltd (SZSE:300144), it is important to understand the ownership structure of the business. With 41% stake, individual investors possess the maximum shares in the company. 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 7.3%.

Let's take a closer look to see what the different types of shareholders can tell us about Songcheng Performance DevelopmentLtd.

View our latest analysis for Songcheng Performance DevelopmentLtd

What Does The Institutional Ownership Tell Us About Songcheng Performance DevelopmentLtd?

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.

We can see that Songcheng Performance DevelopmentLtd 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. 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 Songcheng Performance DevelopmentLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Songcheng Performance DevelopmentLtd. The company's largest shareholder is Hangzhou Songcheng Group Holding Co., Ltd., with ownership of 28%. Qiaoling Huang is the second largest shareholder owning 8.9% of common stock, and Jinyan Songyun Enterprise Management (Hangzhou) Partnership Enterprise (Limited Partnership) holds about 5.0% of the company stock.

We did some more digging and found that 7 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Songcheng Performance DevelopmentLtd

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 Songcheng Performance Development Co.,Ltd. It has a market capitalization of just CN¥23b, and insiders have CN¥3.4b worth of shares in their own names. That's quite significant. 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, who are usually individual investors, hold a 41% stake in Songcheng Performance DevelopmentLtd. 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 33%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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 3 warning signs for Songcheng Performance DevelopmentLtd you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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