Super Telecom Co.,Ltd's (SHSE:603322) stock price dropped 7.4% last week; retail investors would not be happy

Key Insights

• Significant control over Super TelecomLtd by retail 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 12 shareholders
• Insider ownership in Super TelecomLtd is 33%

Every investor in Super Telecom Co.,Ltd (SHSE:603322) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 49% to be precise, is retail investors. 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¥370m 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 Super TelecomLtd.

Check out our latest analysis for Super TelecomLtd

What Does The Institutional Ownership Tell Us About Super TelecomLtd?

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.

Super TelecomLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Super TelecomLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Super TelecomLtd is not owned by hedge funds. Jian Hua Liang is currently the largest shareholder, with 27% of shares outstanding. Hengqin Guangjin Meihao Fund Management Co., Ltd. is the second largest shareholder owning 5.0% of common stock, and GF Fund Management Co., Ltd. holds about 3.7% of the company stock.

A closer look at our ownership figures suggests that the top 12 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Super TelecomLtd

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 Super Telecom Co.,Ltd. Insiders own CN¥1.5b worth of shares in the CN¥4.6b company. 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, who are usually individual investors, hold a 49% stake in Super TelecomLtd. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for Super TelecomLtd (1 is a bit unpleasant) that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.