Sinostone(Guangdong) Co.,Ltd.'s (SZSE:001212) market cap dropped CN¥362m last week; Individual investors bore the brunt

Key Insights

• The considerable ownership by individual investors in Sinostone(Guangdong)Ltd indicates that they collectively have a greater say in management and business strategy
• A total of 2 investors have a majority stake in the company with 52% ownership
• 25% of Sinostone(Guangdong)Ltd is held by insiders

A look at the shareholders of Sinostone(Guangdong) Co.,Ltd. (SZSE:001212) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 39% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 13% decline in share price, individual investors suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Sinostone(Guangdong)Ltd.

See our latest analysis for Sinostone(Guangdong)Ltd

What Does The Institutional Ownership Tell Us About Sinostone(Guangdong)Ltd?

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.

Institutions have a very small stake in Sinostone(Guangdong)Ltd. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in Sinostone(Guangdong)Ltd. Our data shows that Zhuhai Yuminghua Enterprise Management Co., Ltd. is the largest shareholder with 31% of shares outstanding. In comparison, the second and third largest shareholders hold about 21% and 2.9% of the stock. Jun Zhou, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence 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 Sinostone(Guangdong)Ltd

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. 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.

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 Sinostone(Guangdong) Co.,Ltd.. Insiders own CN¥598m worth of shares in the CN¥2.4b company. 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 39% stake in Sinostone(Guangdong)Ltd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 34%, of the Sinostone(Guangdong)Ltd stock. 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. For instance, we've identified 3 warning signs for Sinostone(Guangdong)Ltd (1 is concerning) that 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.