Shenzhen Prolto Supply Chain Management Co.,Ltd's (SZSE:002769) last week's 29% decline must have disappointed retail investors who have a significant stake

Key Insights

• The considerable ownership by retail investors in Shenzhen Prolto Supply Chain ManagementLtd indicates that they collectively have a greater say in management and business strategy
• 49% of the business is held by the top 15 shareholders
• 29% of Shenzhen Prolto Supply Chain ManagementLtd is held by insiders

Every investor in Shenzhen Prolto Supply Chain Management Co.,Ltd (SZSE:002769) should be aware of the most powerful shareholder groups. With 51% 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 insiders who own 29% came under pressure after market cap dropped to CN¥2.2b last week,retail investors took the most losses.

In the chart below, we zoom in on the different ownership groups of Shenzhen Prolto Supply Chain ManagementLtd.

Check out our latest analysis for Shenzhen Prolto Supply Chain ManagementLtd

What Does The Institutional Ownership Tell Us About Shenzhen Prolto Supply Chain ManagementLtd?

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.

As you can see, institutional investors have a fair amount of stake in Shenzhen Prolto Supply Chain ManagementLtd. 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 Shenzhen Prolto Supply Chain ManagementLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Shenzhen Prolto Supply Chain ManagementLtd is not owned by hedge funds. The company's largest shareholder is Shu Chen, with ownership of 12%. Guangdong Green Finance Investment Holdings Group Co., Ltd.., Asset Management Arm is the second largest shareholder owning 10% of common stock, and Yun Zhang holds about 6.9% of the company stock. Yun Zhang, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

Our studies suggest that the top 15 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.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Shenzhen Prolto Supply Chain ManagementLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 Shenzhen Prolto Supply Chain Management Co.,Ltd. Insiders have a CN¥636m stake in this CN¥2.2b business. 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 substantial 51% stake in Shenzhen Prolto Supply Chain ManagementLtd, suggesting it is a fairly popular stock. 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 5.3%, of the Shenzhen Prolto Supply Chain ManagementLtd stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shenzhen Prolto Supply Chain ManagementLtd better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Shenzhen Prolto Supply Chain ManagementLtd you should be aware of.

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.