Individual investors invested in Smartsens Technology (Shanghai) Co., Ltd. (SHSE:688213) copped the brunt of last week's CN¥787m market cap decline

Key Insights

• The considerable ownership by individual investors in Smartsens Technology (Shanghai) indicates that they collectively have a greater say in management and business strategy
• The top 8 shareholders own 50% of the company
• Insiders own 24% of Smartsens Technology (Shanghai)

Every investor in Smartsens Technology (Shanghai) Co., Ltd. (SHSE:688213) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 27% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 4.5% decrease in the stock price last week, individual investors suffered the most losses, but insiders who own 24% stock also took a hit.

Let's delve deeper into each type of owner of Smartsens Technology (Shanghai), beginning with the chart below.

See our latest analysis for Smartsens Technology (Shanghai)

What Does The Institutional Ownership Tell Us About Smartsens Technology (Shanghai)?

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.

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

We note that hedge funds don't have a meaningful investment in Smartsens Technology (Shanghai). With a 14% stake, CEO Chen Xu is the largest shareholder. Huaxin Investment Management Co., Ltd. is the second largest shareholder owning 7.4% of common stock, and Brizan China Holdings Limited holds about 6.2% of the company stock.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 Smartsens Technology (Shanghai)

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 information suggests that insiders maintain a significant holding in Smartsens Technology (Shanghai) Co., Ltd.. It has a market capitalization of just CN¥17b, and insiders have CN¥4.1b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public-- including retail investors -- own 27% 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 Equity Ownership

Private equity firms hold a 7.4% stake in Smartsens Technology (Shanghai). This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

We can see that Private Companies own 23%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Smartsens Technology (Shanghai) better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Smartsens Technology (Shanghai) you should know about.

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.