CEO Zhong Chu Li, Beijing Shiji Information Technology Co., Ltd.'s (SZSE:002153) largest shareholder sees value of holdings go down 4.1% after recent drop

Key Insights

• Beijing Shiji Information Technology's significant insider ownership suggests inherent interests in company's expansion
• 55% of the company is held by a single shareholder (Zhong Chu Li)
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Beijing Shiji Information Technology Co., Ltd. (SZSE:002153), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 60% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥15b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

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

View our latest analysis for Beijing Shiji Information Technology

What Does The Institutional Ownership Tell Us About Beijing Shiji Information Technology?

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.

As you can see, institutional investors have a fair amount of stake in Beijing Shiji Information Technology. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Beijing Shiji Information Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Beijing Shiji Information Technology. Looking at our data, we can see that the largest shareholder is the CEO Zhong Chu Li with 55% of shares outstanding. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. Alibaba Group Holding Limited is the second largest shareholder owning 13% of common stock, and Mei Rong Jiao holds about 3.6% of the company stock.

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 Beijing Shiji Information Technology

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 most recent data indicates that insiders own the majority of Beijing Shiji Information Technology Co., Ltd.. This means they can collectively make decisions for the company. Given it has a market cap of CN¥15b, that means insiders have a whopping CN¥8.7b worth of shares in their own names. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public-- including retail investors -- own 16% stake in the company, and hence can't easily be ignored. 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 3.4%, 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.

Public Company Ownership

It appears to us that public companies own 13% of Beijing Shiji Information Technology. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com