Shenyu Communication Technology Inc.'s (SZSE:300563) stock price dropped 18% last week; retail investors would not be happy

Key Insights

• The considerable ownership by retail investors in Shenyu Communication Technology indicates that they collectively have a greater say in management and business strategy
• A total of 16 investors have a majority stake in the company with 50% ownership
• Insiders own 43% of Shenyu Communication Technology

Every investor in Shenyu Communication Technology Inc. (SZSE:300563) should be aware of the most powerful shareholder groups. With 48% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of retail investors took a hit after last week’s 18% price drop, insiders with their 43% also suffered.

Let's take a closer look to see what the different types of shareholders can tell us about Shenyu Communication Technology.

See our latest analysis for Shenyu Communication Technology

What Does The Institutional Ownership Tell Us About Shenyu Communication 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.

Shenyu Communication Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Shenyu Communication Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Shenyu Communication Technology is not owned by hedge funds. The company's largest shareholder is Feng Juan Ren, with ownership of 24%. Meanwhile, the second and third largest shareholders, hold 17% and 1.2%, of the shares outstanding, respectively. Xiao Nan Tang, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 16 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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

Insider Ownership Of Shenyu Communication 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. 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.

It seems insiders own a significant proportion of Shenyu Communication Technology Inc.. Insiders own CN¥1.9b worth of shares in the CN¥4.4b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 48% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shenyu Communication Technology. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

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. Be aware that Shenyu Communication Technology is showing 2 warning signs in our investment analysis , and 1 of those can't be ignored...

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.