SVG Tech Group Co.,Ltd.'s (SZSE:300331) last week's 11% decline must have disappointed retail investors who have a significant stake

Key Insights

• SVG Tech GroupLtd's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 20 shareholders own 47% of the company
• 28% of SVG Tech GroupLtd is held by insiders

If you want to know who really controls SVG Tech Group Co.,Ltd. (SZSE:300331), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 53% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders, who own 28% shares weren’t spared from last week’s CN¥470m market cap drop, retail investors as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of SVG Tech GroupLtd.

Check out our latest analysis for SVG Tech GroupLtd

What Does The Institutional Ownership Tell Us About SVG Tech GroupLtd?

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.

SVG Tech GroupLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 SVG Tech GroupLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in SVG Tech GroupLtd. From our data, we infer that the largest shareholder is Linsen Chen (who also holds the title of Top Key Executive) with 18% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. Zhangxing Yu is the second largest shareholder owning 8.2% of common stock, and Shenzhen Capital Group Hongtu Private Equity Investment Fund Management (Shenzhen) Co., Ltd. holds about 5.2% of the company stock. Additionally, the company's CEO Zhi Jian Zhu directly holds 0.9% of the total shares outstanding.

Our studies suggest that the top 20 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. 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 SVG Tech GroupLtd

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.

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.

It seems insiders own a significant proportion of SVG Tech Group Co.,Ltd.. Insiders have a CN¥1.1b stake in this CN¥3.9b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 53% of SVG Tech GroupLtd shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Equity Ownership

With an ownership of 5.2%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

We can see that Private Companies own 5.6%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand SVG Tech GroupLtd better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for SVG Tech GroupLtd you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.