Qian Xun Technology Limited's (HKG:1640) market cap rose HK$297m last week; retail investors who hold 54% profited and so did insiders

Key Insights

• Qian Xun Technology's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 5 investors have a majority stake in the company with 46% ownership
• 36% of Qian Xun Technology is held by insiders

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A look at the shareholders of Qian Xun Technology Limited (HKG:1640) can tell us which group is most powerful. The group holding the most number of shares in the company, around 54% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

Retail investors gained the most after market cap touched HK$2.3b last week, while insiders who own 36% also benefitted.

In the chart below, we zoom in on the different ownership groups of Qian Xun Technology.

View our latest analysis for Qian Xun Technology

What Does The Lack Of Institutional Ownership Tell Us About Qian Xun Technology?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Qian Xun Technology might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Qian Xun Technology is not owned by hedge funds. The company's largest shareholder is Kangqiao Sang, with ownership of 25%. With 11% and 4.7% of the shares outstanding respectively, Ye Li and Ruichengtianhe Co., Ltd are the second and third largest shareholders.

Our studies suggest that the top 5 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. 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 Qian Xun 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems insiders own a significant proportion of Qian Xun Technology Limited. Insiders have a HK$824m stake in this HK$2.3b business. 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

The general public -- including retail investors -- own 54% of Qian Xun Technology. 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

Our data indicates that Private Companies hold 9.2%, of the company's shares. 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 Qian Xun Technology better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Qian Xun Technology (at least 1 which can't be ignored) , 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.