Suzhou Gyz Electronic Technology Co.,Ltd's (SHSE:688260) stock price dropped 10% last week; private companies would not be happy

Key Insights

• The considerable ownership by private companies in Suzhou Gyz Electronic TechnologyLtd indicates that they collectively have a greater say in management and business strategy
• The top 7 shareholders own 52% of the company
• 20% of Suzhou Gyz Electronic TechnologyLtd is held by insiders

Every investor in Suzhou Gyz Electronic Technology Co.,Ltd (SHSE:688260) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 35% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, private companies endured the biggest losses as the stock fell by 10%.

Let's take a closer look to see what the different types of shareholders can tell us about Suzhou Gyz Electronic TechnologyLtd.

See our latest analysis for Suzhou Gyz Electronic TechnologyLtd

What Does The Institutional Ownership Tell Us About Suzhou Gyz Electronic 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.

We can see that Suzhou Gyz Electronic TechnologyLtd does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Suzhou Gyz Electronic TechnologyLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Suzhou Gyz Electronic TechnologyLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Bin Wang with 11% of shares outstanding. The second and third largest shareholders are Suzhou Juner Business Management Consulting Partnership Enterprise (Limieted Partnership) and Suzhou Junsan Business Management Consulting Partnership Enterprise (Limieted Partnership), with an equal amount of shares to their name at 8.5%.

We did some more digging and found that 7 of the top shareholders account for roughly 52% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Suzhou Gyz Electronic 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 information suggests that insiders maintain a significant holding in Suzhou Gyz Electronic Technology Co.,Ltd. It has a market capitalization of just CN¥1.6b, and insiders have CN¥321m worth of shares in their own names. 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 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Suzhou Gyz Electronic 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

It seems that Private Companies own 35%, of the Suzhou Gyz Electronic TechnologyLtd stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Suzhou Gyz Electronic TechnologyLtd has 3 warning signs (and 2 which are a bit unpleasant) we think you should know about.

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