Retail investors among RAISECOM TECHNOLOGY CO.,Ltd.'s (SHSE:603803) largest stockholders and were hit after last week's 14% price drop

Key Insights

• RAISECOM TECHNOLOGYLtd's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 19 shareholders own 48% of the company
• 45% of RAISECOM TECHNOLOGYLtd is held by insiders

If you want to know who really controls RAISECOM TECHNOLOGY CO.,Ltd. (SHSE:603803), then you'll have to look at the makeup of its share registry. With 52% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders who own 45% came under pressure after market cap dropped to CN¥2.5b last week,retail investors took the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about RAISECOM TECHNOLOGYLtd.

Check out our latest analysis for RAISECOM TECHNOLOGYLtd

What Does The Institutional Ownership Tell Us About RAISECOM 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.

Less than 5% of RAISECOM TECHNOLOGYLtd is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in RAISECOM TECHNOLOGYLtd. Jian Hong Ren is currently the company's largest shareholder with 8.9% of shares outstanding. The second and third largest shareholders are Lei Gao and Chun Cheng Zhu, with an equal amount of shares to their name at 8.9%.

On studying our ownership data, we found that 19 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. 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 RAISECOM 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.

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 RAISECOM TECHNOLOGY CO.,Ltd.. Insiders have a CN¥1.1b stake in this CN¥2.5b 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

The general public, who are usually individual investors, hold a substantial 52% stake in RAISECOM TECHNOLOGYLtd, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for RAISECOM TECHNOLOGYLtd (1 makes us a bit uncomfortable) that you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

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

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.