Both individual investors who control a good portion of Kingnet Network Co., Ltd. (SZSE:002517) along with institutions must be dismayed after last week's 3.7% decrease

Key Insights

• Significant control over Kingnet Network by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 25 shareholders own 47% of the company
• Insiders own 21% of Kingnet Network

Every investor in Kingnet Network Co., Ltd. (SZSE:002517) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 45% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 3.7% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 23% stock also took a hit.

Let's delve deeper into each type of owner of Kingnet Network, beginning with the chart below.

Check out our latest analysis for Kingnet Network

What Does The Institutional Ownership Tell Us About Kingnet Network?

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.

Kingnet Network already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Kingnet Network's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Kingnet Network. Feng Jin is currently the largest shareholder, with 15% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.3% and 2.7% of the stock.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Kingnet Network

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. 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.

It seems insiders own a significant proportion of Kingnet Network Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥4.2b stake in this CN¥20b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 45% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kingnet Network. 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

It seems that Private Companies own 9.5%, of the Kingnet Network stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Kingnet Network better, we need to consider many other factors. For example, we've discovered 1 warning sign for Kingnet Network that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.