Individual investors invested in Shenzhen Farben Information Technology Co.,Ltd. (SZSE:300925) copped the brunt of last week's CN¥562m market cap decline

Key Insights

• Significant control over Shenzhen Farben Information TechnologyLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 11 shareholders own 50% of the company
• 38% of Shenzhen Farben Information TechnologyLtd is held by insiders

If you want to know who really controls Shenzhen Farben Information Technology Co.,Ltd. (SZSE:300925), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual investors with 44% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders who own 38% came under pressure after market cap dropped to CN¥4.1b last week,individual investors took the most losses.

Let's delve deeper into each type of owner of Shenzhen Farben Information TechnologyLtd, beginning with the chart below.

See our latest analysis for Shenzhen Farben Information TechnologyLtd

What Does The Institutional Ownership Tell Us About Shenzhen Farben Information TechnologyLtd?

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.

Shenzhen Farben Information TechnologyLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Shenzhen Farben Information TechnologyLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Shenzhen Farben Information TechnologyLtd. The company's CEO Hua Yan is the largest shareholder with 33% of shares outstanding. The second and third largest shareholders are Xinyu Gengdubang Innovation Investment Partnership Enterprise (Limited Partnership) and Shenzhen Jiajiatong Investment Partnership Enterprise (Limited Partnership), with an equal amount of shares to their name at 2.5%.

After doing some more digging, we found that the top 11 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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

Insider Ownership Of Shenzhen Farben Information TechnologyLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders maintain a significant holding in Shenzhen Farben Information Technology Co.,Ltd.. Insiders have a CN¥1.6b stake in this CN¥4.1b business. 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 44% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shenzhen Farben Information TechnologyLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 7.4%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private 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. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Shenzhen Farben Information TechnologyLtd 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.

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