Shenzhen Bingchuan Network Co.,Ltd.'s (SZSE:300533) market cap dropped CN¥466m last week; Individual investors bore the brunt

Key Insights

• The considerable ownership by individual investors in Shenzhen Bingchuan NetworkLtd indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 50% of the company
• Insiders own 44% of Shenzhen Bingchuan NetworkLtd

If you want to know who really controls Shenzhen Bingchuan Network Co.,Ltd. (SZSE:300533), 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 individual investors with 50% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders, who own 44% shares weren’t spared from last week’s CN¥466m market cap drop, individual investors as a group suffered the maximum losses

Let's delve deeper into each type of owner of Shenzhen Bingchuan NetworkLtd, beginning with the chart below.

View our latest analysis for Shenzhen Bingchuan NetworkLtd

What Does The Institutional Ownership Tell Us About Shenzhen Bingchuan NetworkLtd?

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.

Shenzhen Bingchuan NetworkLtd 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. 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 Shenzhen Bingchuan NetworkLtd'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 Shenzhen Bingchuan NetworkLtd. The company's largest shareholder is He Guo Liu, with ownership of 39%. Meanwhile, the second and third largest shareholders, hold 1.9% and 1.6%, of the shares outstanding, respectively.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Bingchuan NetworkLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own a reasonable proportion of Shenzhen Bingchuan Network Co.,Ltd.. Insiders have a CN¥1.9b stake in this CN¥4.3b 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, mostly comprising of individual investors, collectively holds 50% of Shenzhen Bingchuan NetworkLtd shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shenzhen Bingchuan NetworkLtd better, we need to consider many other factors. For example, we've discovered 3 warning signs for Shenzhen Bingchuan NetworkLtd (2 make us uncomfortable!) that you should be aware of before investing here.

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.