Shenzhen SunXing Light Alloys Materials Co.,Ltd.'s (SHSE:603978) market cap dropped CN¥187m last week; Retail investors bore the brunt

Key Insights

• Significant control over Shenzhen SunXing Light Alloys MaterialsLtd by retail investors implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 4 shareholders
• 29% of Shenzhen SunXing Light Alloys MaterialsLtd is held by insiders

Every investor in Shenzhen SunXing Light Alloys Materials Co.,Ltd. (SHSE:603978) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 38% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders, who own 29% shares weren’t spared from last week’s CN¥187m market cap drop, retail investors as a group suffered the maximum losses

Let's take a closer look to see what the different types of shareholders can tell us about Shenzhen SunXing Light Alloys MaterialsLtd.

View our latest analysis for Shenzhen SunXing Light Alloys MaterialsLtd

What Does The Institutional Ownership Tell Us About Shenzhen SunXing Light Alloys MaterialsLtd?

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.

Shenzhen SunXing Light Alloys MaterialsLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Shenzhen SunXing Light Alloys MaterialsLtd's earnings history below. Of course, the future is what really matters.

Shenzhen SunXing Light Alloys MaterialsLtd is not owned by hedge funds. With a 21% stake, CEO Xuemin Chen is the largest shareholder. In comparison, the second and third largest shareholders hold about 15% and 9.3% of the stock.

On looking further, we found that 51% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Shenzhen SunXing Light Alloys MaterialsLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 Shenzhen SunXing Light Alloys Materials Co.,Ltd.. Insiders have a CN¥458m stake in this CN¥1.6b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 38% stake in Shenzhen SunXing Light Alloys MaterialsLtd. 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 26%, 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. Take risks for example - Shenzhen SunXing Light Alloys MaterialsLtd has 2 warning signs we think you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.