Focus Lightings Tech Co., Ltd.'s (SZSE:300708) stock price dropped 6.1% last week; retail investors would not be happy

Key Insights

• The considerable ownership by retail investors in Focus Lightings Tech indicates that they collectively have a greater say in management and business strategy
• A total of 23 investors have a majority stake in the company with 41% ownership
• 37% of Focus Lightings Tech is held by insiders

Every investor in Focus Lightings Tech Co., Ltd. (SZSE:300708) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 59% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders who own 37% came under pressure after market cap dropped to CN¥5.8b last week,retail investors took the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Focus Lightings Tech.

See our latest analysis for Focus Lightings Tech

What Does The Institutional Ownership Tell Us About Focus Lightings Tech?

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.

Institutions have a very small stake in Focus Lightings Tech. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Focus Lightings Tech is not owned by hedge funds. The company's largest shareholder is Hua Rong Pan, with ownership of 31%. For context, the second largest shareholder holds about 2.8% of the shares outstanding, followed by an ownership of 1.6% by the third-largest shareholder.

On studying our ownership data, we found that 23 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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Focus Lightings Tech

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.

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 information suggests that insiders maintain a significant holding in Focus Lightings Tech Co., Ltd.. It has a market capitalization of just CN¥5.8b, and insiders have CN¥2.2b 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 -- including retail investors -- own 59% of Focus Lightings Tech. 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.

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. Take risks for example - Focus Lightings Tech has 2 warning signs we think you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.