Institutions along with retail investors who hold considerable shares inPiesat Information Technology Co., Ltd. (SHSE:688066) come under pressure; lose 12% of holdings value

Key Insights

• Significant control over Piesat Information Technology by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 16 shareholders own 50% of the company
• 22% of Piesat Information Technology is held by insiders

If you want to know who really controls Piesat Information Technology Co., Ltd. (SHSE:688066), then you'll have to look at the makeup of its share registry. We can see that retail investors own the lion's share in the company with 47% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions who own 24% came under pressure after market cap dropped to CN¥4.8b last week,retail investors took the most losses.

In the chart below, we zoom in on the different ownership groups of Piesat Information Technology.

View our latest analysis for Piesat Information Technology

What Does The Institutional Ownership Tell Us About Piesat Information Technology?

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 Piesat Information Technology 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 Piesat Information Technology, (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 Piesat Information Technology. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Piesat Information Technology's case, its Top Key Executive, Yuxiang Wang, is the largest shareholder, holding 22% of shares outstanding. Beijing Hangxing Yingchuang Technology Center (Limited Partnership) is the second largest shareholder owning 7.4% of common stock, and Schroder Investment Management (Hong Kong) Ltd. holds about 3.8% of the company stock.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 16 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Piesat Information Technology

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 most recent data indicates that insiders own a reasonable proportion of Piesat Information Technology Co., Ltd.. It has a market capitalization of just CN¥4.8b, and insiders have CN¥1.0b worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

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 Equity Ownership

With an ownership of 7.4%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 2 warning signs we've spotted with Piesat Information Technology .

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.