China Conch Environment Protection Holdings Limited's (HKG:587) stock price dropped 10.0% last week; retail investors would not be happy

Key Insights

• The considerable ownership by retail investors in China Conch Environment Protection Holdings indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 41% of the company
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

Every investor in China Conch Environment Protection Holdings Limited (HKG:587) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 58% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 10.0% decline in share price, retail investors suffered the most losses.

In the chart below, we zoom in on the different ownership groups of China Conch Environment Protection Holdings.

Check out our latest analysis for China Conch Environment Protection Holdings

What Does The Institutional Ownership Tell Us About China Conch Environment Protection Holdings?

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 China Conch Environment Protection Holdings. 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. 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 China Conch Environment Protection Holdings' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in China Conch Environment Protection Holdings. Our data shows that Anhui Conch Cement Company Limited is the largest shareholder with 20% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.1% and 3.0%, of the shares outstanding, respectively.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of China Conch Environment Protection Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

We can report that insiders do own shares in China Conch Environment Protection Holdings Limited. As individuals, the insiders collectively own HK$135m worth of the HK$2.1b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 58% stake in China Conch Environment Protection Holdings, 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 5.1%, of the China Conch Environment Protection Holdings stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Public Company Ownership

We can see that public companies hold 21% of the China Conch Environment Protection Holdings shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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. For instance, we've identified 2 warning signs for China Conch Environment Protection Holdings (1 shouldn't be ignored) that you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.