Kunshan Kersen Science & Technology Co.,Ltd.'s (SHSE:603626) stock price dropped 9.0% last week; individual investors would not be happy

Key Insights

• Kunshan Kersen Science & TechnologyLtd's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 25 investors have a majority stake in the company with 49% ownership
• Insiders own 31% of Kunshan Kersen Science & TechnologyLtd

A look at the shareholders of Kunshan Kersen Science & Technology Co.,Ltd. (SHSE:603626) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 51% ownership. 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 31% shares weren’t spared from last week’s CN¥524m market cap drop, individual investors as a group suffered the maximum losses

Let's delve deeper into each type of owner of Kunshan Kersen Science & TechnologyLtd, beginning with the chart below.

Check out our latest analysis for Kunshan Kersen Science & TechnologyLtd

What Does The Institutional Ownership Tell Us About Kunshan Kersen Science & TechnologyLtd?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Kunshan Kersen Science & TechnologyLtd. 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 Kunshan Kersen Science & TechnologyLtd'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 Kunshan Kersen Science & TechnologyLtd. Our data shows that Jin Gen Xu is the largest shareholder with 30% of shares outstanding. Shanghai huixiu investment management co., ltd is the second largest shareholder owning 5.1% of common stock, and Zhejiang Qihou Asset Management Co., Ltd. holds about 4.1% of the company stock.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Kunshan Kersen Science & TechnologyLtd

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 Kunshan Kersen Science & Technology Co.,Ltd.. It has a market capitalization of just CN¥5.3b, and insiders have CN¥1.6b 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, mostly comprising of individual investors, collectively holds 51% of Kunshan Kersen Science & TechnologyLtd shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

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. Case in point: We've spotted 3 warning signs for Kunshan Kersen Science & TechnologyLtd you should be aware of, and 2 of them are concerning.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.