Shenzhen Kingkey Smart Agriculture Times Co.,Ltd's (SZSE:000048) last week's 5.5% decline must have disappointed private companies who have a significant stake

Key Insights

• Significant control over Shenzhen Kingkey Smart Agriculture TimesLtd by private companies implies that the general public has more power to influence management and governance-related decisions
• 58% of the company is held by a single shareholder (KINGKEY GROUP CO., LTD.)
• Institutional ownership in Shenzhen Kingkey Smart Agriculture TimesLtd is 20%

A look at the shareholders of Shenzhen Kingkey Smart Agriculture Times Co.,Ltd (SZSE:000048) can tell us which group is most powerful. With 58% stake, private companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private companies as a group endured the highest losses last week after market cap fell by CN¥468m.

In the chart below, we zoom in on the different ownership groups of Shenzhen Kingkey Smart Agriculture TimesLtd.

Check out our latest analysis for Shenzhen Kingkey Smart Agriculture TimesLtd

What Does The Institutional Ownership Tell Us About Shenzhen Kingkey Smart Agriculture TimesLtd?

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.

We can see that Shenzhen Kingkey Smart Agriculture TimesLtd does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Shenzhen Kingkey Smart Agriculture TimesLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Shenzhen Kingkey Smart Agriculture TimesLtd. The company's largest shareholder is KINGKEY GROUP CO., LTD., with ownership of 58%. 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 Qianhai Pengcheng Wanli Capital Management (Shenzhen) Co., Ltd. and Zircon Private Securities Fund Management Hainan Co.,Ltd., with an equal amount of shares to their name at 5.0%.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Shenzhen Kingkey Smart Agriculture TimesLtd

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.

Our data suggests that insiders own under 1% of Shenzhen Kingkey Smart Agriculture Times Co.,Ltd in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own CN¥24m worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 22% stake in the company, and hence can't easily be ignored. 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

Our data indicates that Private Companies hold 58%, 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. Be aware that Shenzhen Kingkey Smart Agriculture TimesLtd is showing 2 warning signs in our investment analysis , and 1 of those is a bit concerning...

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.