Retail investors are CETC Chips Technology Inc.'s (SHSE:600877) biggest owners and were hit after market cap dropped CN¥474m

Key Insights

• Significant control over CETC Chips Technology by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 11 investors have a majority stake in the company with 51% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in CETC Chips Technology Inc. (SHSE:600877) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 47% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 3.9% decline in share price, retail investors suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about CETC Chips Technology.

See our latest analysis for CETC Chips Technology

What Does The Institutional Ownership Tell Us About CETC Chips Technology?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

CETC Chips Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 CETC Chips Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in CETC Chips Technology. Our data shows that China Electronics Technology Group Corporation is the largest shareholder with 38% of shares outstanding. With 2.5% and 2.2% of the shares outstanding respectively, Beijing Yifengrun Investment Consulting Co., Ltd. and Tianjin Lishen Battery Co., Ltd. are the second and third largest shareholders.

A closer look at our ownership figures suggests that the top 11 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 CETC Chips Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own less than 1% of CETC Chips Technology Inc.. However, it's possible that insiders might have an indirect interest through a more complex structure. Keep in mind that it's a big company, and the insiders own CN¥9.2m worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 47% 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

We can see that Private Companies own 43%, of the shares on issue. 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 CETC Chips Technology better, we need to consider many other factors. For instance, we've identified 1 warning sign for CETC Chips Technology that you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.