Retail investors are Lakala Payment Co., Ltd.'s (SZSE:300773) biggest owners and were hit after market cap dropped CN¥413m

Key Insights

• Significant control over Lakala Payment by retail investors implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 14 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. And the group that holds the biggest piece of the pie are retail investors with 48% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, retail investors endured the biggest losses as the stock fell by 3.8%.

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

Check out 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.

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

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. In comparison, the second and third largest shareholders hold about 10% and 3.9% of the stock. Sun Taoran, who is the second-largest shareholder, also happens to hold the title of President.

After doing some more digging, we found that the top 14 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Lakala Payment

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Our information suggests that insiders maintain a significant holding in Lakala Payment Co., Ltd.. Insiders own CN¥1.4b worth of shares in the CN¥11b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. 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 48% stake in Lakala Payment. 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.

Public Company Ownership

Public companies currently own 27% of Lakala Payment stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Lakala Payment is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

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.

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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.