Individual investors invested in Hangzhou CNCR-IT Co.,Ltd (SZSE:300250) copped the brunt of last week's CN¥304m market cap decline

Key Insights

• The considerable ownership by individual investors in Hangzhou CNCR-ITLtd indicates that they collectively have a greater say in management and business strategy
• 40% of the business is held by the top 23 shareholders
• 35% of Hangzhou CNCR-ITLtd is held by insiders

Every investor in Hangzhou CNCR-IT Co.,Ltd (SZSE:300250) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 60% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 11% decrease in the stock price last week, individual investors suffered the most losses, but insiders who own 35% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of Hangzhou CNCR-ITLtd.

See our latest analysis for Hangzhou CNCR-ITLtd

What Does The Institutional Ownership Tell Us About Hangzhou CNCR-ITLtd?

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.

Institutions have a very small stake in Hangzhou CNCR-ITLtd. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. 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.

We note that hedge funds don't have a meaningful investment in Hangzhou CNCR-ITLtd. The company's CEO Aijin Hong is the largest shareholder with 35% of shares outstanding. For context, the second largest shareholder holds about 2.0% of the shares outstanding, followed by an ownership of 0.6% by the third-largest shareholder.

Our studies suggest that the top 23 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 Hangzhou CNCR-ITLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

It seems insiders own a significant proportion of Hangzhou CNCR-IT Co.,Ltd. It has a market capitalization of just CN¥2.6b, and insiders have CN¥901m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 60% of Hangzhou CNCR-ITLtd shares. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Hangzhou CNCR-ITLtd you should know about.

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.