SUPCON Technology Co., Ltd.'s (SHSE:688777) market cap dropped CN¥2.9b last week; individual investors who hold 39% were hit as were institutions

Key Insights

• Significant control over SUPCON Technology by retail investors implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 17 shareholders
• Insider ownership in SUPCON Technology is 17%

To get a sense of who is truly in control of SUPCON Technology Co., Ltd. (SHSE:688777), it is important to understand the ownership structure of the business. With 39% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of retail investors took a hit after last week’s 7.4% price drop, institutions with their 35% holdings also suffered.

In the chart below, we zoom in on the different ownership groups of SUPCON Technology.

View our latest analysis for SUPCON Technology

What Does The Institutional Ownership Tell Us About SUPCON Technology?

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 SUPCON Technology. 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 SUPCON Technology's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in SUPCON Technology. Min Chu is currently the company's largest shareholder with 16% of shares outstanding. Hangzhou Yuancheng Enterprise Management Partnership Enterprise (Limited Partnership) is the second largest shareholder owning 7.3% of common stock, and China Asset Management Co. Ltd. holds about 4.8% of the company stock.

A closer look at our ownership figures suggests that the top 17 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of SUPCON Technology

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 SUPCON Technology Co., Ltd.. It has a market capitalization of just CN¥36b, and insiders have CN¥6.3b worth of shares in their own names. That's quite significant. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 39% ownership, the general public, mostly comprising of individual investors, have some degree of sway over SUPCON Technology. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 7.3%, of the SUPCON Technology stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand SUPCON Technology better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for SUPCON Technology 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.