Individual investors are Suzhou Hengmingda Electronic Technology Co., Ltd.'s (SZSE:002947) biggest owners and were hit after market cap dropped CN¥383m

Key Insights

• Significant control over Suzhou Hengmingda Electronic Technology by individual investors implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 23 shareholders
• Insider ownership in Suzhou Hengmingda Electronic Technology is 33%

If you want to know who really controls Suzhou Hengmingda Electronic Technology Co., Ltd. (SZSE:002947), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 47% 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 33% shares weren’t spared from last week’s CN¥383m market cap drop, individual investors as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of Suzhou Hengmingda Electronic Technology.

View our latest analysis for Suzhou Hengmingda Electronic Technology

What Does The Institutional Ownership Tell Us About Suzhou Hengmingda Electronic Technology?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Suzhou Hengmingda Electronic Technology. 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. 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 Suzhou Hengmingda Electronic Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Suzhou Hengmingda Electronic Technology. Our data shows that Shiping Jing is the largest shareholder with 25% of shares outstanding. Chen Xia is the second largest shareholder owning 4.1% of common stock, and Jingping Jing holds about 3.0% of the company stock. Two of the top three shareholders happen to be Senior Key Executive and Vice Chairman, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 23 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Suzhou Hengmingda Electronic Technology

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 most recent data indicates that insiders own a reasonable proportion of Suzhou Hengmingda Electronic Technology Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥2.9b stake in this CN¥8.8b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 47% stake in Suzhou Hengmingda Electronic Technology. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Suzhou Hengmingda Electronic Technology (of which 1 doesn't sit too well with us!) you should know about.

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.

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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.