Ningbo Lian Technology Co.,Ltd's (SZSE:300784) last week's 10% decline must have disappointed private companies who have a significant stake

Key Insights

• Ningbo Lian TechnologyLtd's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• Zhejiang Habi Intelligent Technology Co., Ltd. owns 55% of the company
• 14% of Ningbo Lian TechnologyLtd is held by insiders

If you want to know who really controls Ningbo Lian Technology Co.,Ltd (SZSE:300784), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 56% 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 10% decline in share price, private companies suffered the most losses.

Let's delve deeper into each type of owner of Ningbo Lian TechnologyLtd, beginning with the chart below.

See our latest analysis for Ningbo Lian TechnologyLtd

What Does The Lack Of Institutional Ownership Tell Us About Ningbo Lian TechnologyLtd?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Ningbo Lian TechnologyLtd, for yourself, below.

We note that hedge funds don't have a meaningful investment in Ningbo Lian TechnologyLtd. Our data shows that Zhejiang Habi Intelligent Technology Co., Ltd. is the largest shareholder with 55% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. The second and third largest shareholders are Shifeng Li and Yi Qiu, with an equal amount of shares to their name at 6.0%. Yi Qiu, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Ningbo Lian TechnologyLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 Ningbo Lian Technology Co.,Ltd. It has a market capitalization of just CN¥3.1b, and insiders have CN¥441m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 29% stake in Ningbo Lian TechnologyLtd. 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

We can see that Private Companies own 56%, of the shares on issue. 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. Be aware that Ningbo Lian TechnologyLtd is showing 3 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.