Qinghai Spring Medicinal Resources Technology Co., Ltd.'s (SHSE:600381) market cap surged CN¥204m last week, retail investors who have a lot riding on the company were rewarded

Key Insights

• Significant control over Qinghai Spring Medicinal Resources Technology by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 12 shareholders own 49% of the company
• 10% of Qinghai Spring Medicinal Resources Technology is held by insiders

Every investor in Qinghai Spring Medicinal Resources Technology Co., Ltd. (SHSE:600381) should be aware of the most powerful shareholder groups. With 51% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, retail investors were the biggest beneficiaries of last week’s 13% gain.

Let's delve deeper into each type of owner of Qinghai Spring Medicinal Resources Technology, beginning with the chart below.

View our latest analysis for Qinghai Spring Medicinal Resources Technology

What Does The Institutional Ownership Tell Us About Qinghai Spring Medicinal Resources Technology?

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.

Qinghai Spring Medicinal Resources Technology 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. 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 Qinghai Spring Medicinal Resources Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Qinghai Spring Medicinal Resources Technology is not owned by hedge funds. The company's largest shareholder is Tibet Rongen Technology Co., Ltd., with ownership of 32%. Meanwhile, the second and third largest shareholders, hold 9.8% and 1.8%, of the shares outstanding, respectively.

On studying our ownership data, we found that 12 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Qinghai Spring Medicinal Resources Technology

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.

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 most recent data indicates that insiders own a reasonable proportion of Qinghai Spring Medicinal Resources Technology Co., Ltd.. It has a market capitalization of just CN¥1.7b, and insiders have CN¥182m worth of shares in their own names. 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 substantial 51% stake in Qinghai Spring Medicinal Resources Technology, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

Our data indicates that Private Companies hold 32%, of the company's shares. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 2 warning signs for Qinghai Spring Medicinal Resources Technology (1 shouldn't be ignored) that you should be aware of.

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.