Shanghai Titan Scientific Co., Ltd.'s (SHSE:688133) 12% loss last week hit both individual investors who own 38% as well as institutions

Key Insights

• The considerable ownership by retail investors in Shanghai Titan Scientific indicates that they collectively have a greater say in management and business strategy
• A total of 13 investors have a majority stake in the company with 51% ownership
• Insiders own 28% of Shanghai Titan Scientific

A look at the shareholders of Shanghai Titan Scientific Co., Ltd. (SHSE:688133) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 38% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions who own 33% came under pressure after market cap dropped to CN¥2.7b last week,retail investors took the most losses.

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

View our latest analysis for Shanghai Titan Scientific

What Does The Institutional Ownership Tell Us About Shanghai Titan Scientific?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Shanghai Titan Scientific 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. 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 Shanghai Titan Scientific, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Shanghai Titan Scientific. Yingbo Xie is currently the company's largest shareholder with 9.9% of shares outstanding. The second and third largest shareholders are Qing Zhang and Hua Zhang, with an equal amount of shares to their name at 4.6%. Interestingly, the bottom two of the top three shareholders also hold the title of Chief Executive Officer and Member of the Board of Directors, respectively, suggesting that these insiders have a personal stake in the company.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 13 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 Shanghai Titan Scientific

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.

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.

Our information suggests that insiders maintain a significant holding in Shanghai Titan Scientific Co., Ltd.. Insiders have a CN¥770m stake in this CN¥2.7b business. 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, who are usually individual investors, hold a 38% stake in Shanghai Titan Scientific. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shanghai Titan Scientific better, we need to consider many other factors. Take risks for example - Shanghai Titan Scientific has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

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.