Xinjiang Sailing Information Technology Co., Ltd.'s (SZSE:300588) market cap up CN¥221m last week, benefiting both individual investors who own 57% as well as insiders

Key Insights

• Xinjiang Sailing Information Technology's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 20 investors have a majority stake in the company with 43% ownership
• Insider ownership in Xinjiang Sailing Information Technology is 33%

Every investor in Xinjiang Sailing Information Technology Co., Ltd. (SZSE:300588) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 57% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While individual investors were the group that benefitted the most from last week’s CN¥221m market cap gain, insiders too had a 33% share in those profits.

Let's take a closer look to see what the different types of shareholders can tell us about Xinjiang Sailing Information Technology.

View our latest analysis for Xinjiang Sailing Information Technology

What Does The Institutional Ownership Tell Us About Xinjiang Sailing 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.

Xinjiang Sailing Information Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Xinjiang Sailing Information Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Xinjiang Sailing Information Technology. Looking at our data, we can see that the largest shareholder is Kai Wen He with 23% of shares outstanding. With 10% and 5.0% of the shares outstanding respectively, Ya Mei Yue and Shanghai Yuangui Technology Co., Ltd. are the second and third largest shareholders. Ya Mei Yue, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

On studying our ownership data, we found that 20 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Xinjiang Sailing Information Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 Xinjiang Sailing Information Technology Co., Ltd.. Insiders own CN¥594m worth of shares in the CN¥1.8b 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

The general public, who are usually individual investors, hold a substantial 57% stake in Xinjiang Sailing Information Technology, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

We can see that Private Companies own 5.0%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Xinjiang Sailing Information Technology you should know about.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.