Individual investors invested in Foshan Blue Rocket Electronics Co.,Ltd. (SZSE:301348) copped the brunt of last week's CN¥430m market cap decline

Key Insights

• Foshan Blue Rocket ElectronicsLtd's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 8 investors have a majority stake in the company with 51% ownership
• Insider ownership in Foshan Blue Rocket ElectronicsLtd is 36%

To get a sense of who is truly in control of Foshan Blue Rocket Electronics Co.,Ltd. (SZSE:301348), it is important to understand the ownership structure of the business. With 46% stake, individual investors 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).

While insiders, who own 36% shares weren’t spared from last week’s CN¥430m market cap drop, individual investors as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of Foshan Blue Rocket ElectronicsLtd.

Check out our latest analysis for Foshan Blue Rocket ElectronicsLtd

What Does The Institutional Ownership Tell Us About Foshan Blue Rocket ElectronicsLtd?

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 Foshan Blue Rocket ElectronicsLtd does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Foshan Blue Rocket ElectronicsLtd's earnings history below. Of course, the future is what really matters.

Foshan Blue Rocket ElectronicsLtd is not owned by hedge funds. The company's largest shareholder is Chengming Wang, with ownership of 16%. In comparison, the second and third largest shareholders hold about 9.9% and 9.8% of the stock. Additionally, the company's CEO Fengjiang Yuan directly holds 0.8% of the total shares outstanding.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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

Insider Ownership Of Foshan Blue Rocket ElectronicsLtd

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 a reasonable proportion of Foshan Blue Rocket Electronics Co.,Ltd.. Insiders own CN¥2.4b worth of shares in the CN¥6.5b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 46% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Foshan Blue Rocket ElectronicsLtd. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 12%, 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:

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 example, we've discovered 5 warning signs for Foshan Blue Rocket ElectronicsLtd (2 shouldn't be ignored!) that you should be aware of before investing here.

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.