Yongyue Science&Technology Co.,Ltd's (SHSE:603879) market cap dropped CN¥146m last week; Individual investors bore the brunt

Key Insights

• The considerable ownership by individual investors in Yongyue Science&TechnologyLtd indicates that they collectively have a greater say in management and business strategy
• 43% of the business is held by the top 14 shareholders
• Insiders own 18% of Yongyue Science&TechnologyLtd

To get a sense of who is truly in control of Yongyue Science&Technology Co.,Ltd (SHSE:603879), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 57% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of individual investors took a hit after last week’s 11% price drop, insiders with their 18% also suffered.

Let's delve deeper into each type of owner of Yongyue Science&TechnologyLtd, beginning with the chart below.

View our latest analysis for Yongyue Science&TechnologyLtd

What Does The Institutional Ownership Tell Us About Yongyue Science&TechnologyLtd?

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 Yongyue Science&TechnologyLtd. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Yongyue Science&TechnologyLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Yongyue Science&TechnologyLtd. Our data shows that Jiangsu Huaying Enterprise Management Co., Ltd. is the largest shareholder with 17% of shares outstanding. Wen Chang Fu is the second largest shareholder owning 13% of common stock, and Beijing Heyi Yingtong Asset Management Co., Ltd. holds about 6.1% of the company stock.

On studying our ownership data, we found that 14 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Yongyue Science&TechnologyLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own a reasonable proportion of Yongyue Science&Technology Co.,Ltd. It has a market capitalization of just CN¥1.2b, and insiders have CN¥212m worth of shares in their own names. 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 -- including retail investors -- own 57% of Yongyue Science&TechnologyLtd. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

Our data indicates that Private Companies hold 17%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for Yongyue Science&TechnologyLtd you should be aware of.

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.