Cubic Digital Technology Co.,Ltd.'s (SZSE:300344) largest shareholders are retail investors who were rewarded as market cap surged CN¥558m last week

Key Insights

• The considerable ownership by retail investors in Cubic Digital TechnologyLtd indicates that they collectively have a greater say in management and business strategy
• A total of 13 investors have a majority stake in the company with 47% ownership
• 23% of Cubic Digital TechnologyLtd is held by insiders

To get a sense of who is truly in control of Cubic Digital Technology Co.,Ltd. (SZSE:300344), it is important to understand the ownership structure of the business. 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).

As a result, retail investors were the biggest beneficiaries of last week’s 16% gain.

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

See our latest analysis for Cubic Digital TechnologyLtd

What Does The Institutional Ownership Tell Us About Cubic Digital TechnologyLtd?

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.

Less than 5% of Cubic Digital TechnologyLtd is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. 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.

Cubic Digital TechnologyLtd is not owned by hedge funds. Hefei Lingcen Technology Consulting Partnership Enterprise (Limited Partnership) is currently the largest shareholder, with 23% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 11%, of the shares outstanding, respectively. Fan Zhi, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.

Our studies suggest that the top 13 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 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Cubic Digital TechnologyLtd

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. 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 Cubic Digital Technology Co.,Ltd.. It has a market capitalization of just CN¥4.1b, and insiders have CN¥934m worth of shares in their own names. 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 -- including retail investors -- own 53% of Cubic Digital TechnologyLtd. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

It seems that Private Companies own 23%, of the Cubic Digital TechnologyLtd stock. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Cubic Digital TechnologyLtd , and understanding them should be part of your investment process.

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.