Retail investors among Lakala Payment Co., Ltd.'s (SZSE:300773) largest shareholders, saw gain in holdings value after stock jumped 3.6% last week

Key Insights

• The considerable ownership by retail investors in Lakala Payment indicates that they collectively have a greater say in management and business strategy
• 49% of the business is held by the top 25 shareholders
• 13% of Lakala Payment is held by insiders

A look at the shareholders of Lakala Payment Co., Ltd. (SZSE:300773) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, retail investors were the biggest beneficiaries of last week’s 3.6% gain.

In the chart below, we zoom in on the different ownership groups of Lakala Payment.

View our latest analysis for Lakala Payment

What Does The Institutional Ownership Tell Us About Lakala Payment?

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 Lakala Payment does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Lakala Payment's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Lakala Payment. Our data shows that Legend Holdings Corporation is the largest shareholder with 27% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.7% and 1.8%, of the shares outstanding, respectively. Sun Taoran, who is the second-largest shareholder, also happens to hold the title of President.

Our studies suggest that the top 25 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.

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 Lakala Payment

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.

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.

It seems insiders own a significant proportion of Lakala Payment Co., Ltd.. Insiders own CN¥1.8b worth of shares in the CN¥14b company. That's quite meaningful. 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 51% of Lakala Payment. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Public Company Ownership

It appears to us that public companies own 27% of Lakala Payment. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Lakala Payment better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Lakala Payment you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

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

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.