Jiangsu Recbio Technology Co., Ltd.'s (HKG:2179) market cap dropped HK$398m last week; Retail investors bore the brunt

Key Insights

• The considerable ownership by retail investors in Jiangsu Recbio Technology indicates that they collectively have a greater say in management and business strategy
• A total of 5 investors have a majority stake in the company with 54% ownership
• Institutional ownership in Jiangsu Recbio Technology is 16%

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Every investor in Jiangsu Recbio Technology Co., Ltd. (HKG:2179) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 24% 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 12% decline in share price, retail investors suffered the most losses.

Let's delve deeper into each type of owner of Jiangsu Recbio Technology, beginning with the chart below.

Check out our latest analysis for Jiangsu Recbio Technology

What Does The Institutional Ownership Tell Us About Jiangsu Recbio Technology?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Jiangsu Recbio Technology. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Jiangsu Recbio Technology's earnings history below. Of course, the future is what really matters.

Jiangsu Recbio Technology is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Taizhou Yuangong Technology Partnership (Limited Partnership) with 17% of shares outstanding. For context, the second largest shareholder holds about 14% of the shares outstanding, followed by an ownership of 8.8% by the third-largest shareholder.

On looking further, we found that 54% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Jiangsu Recbio Technology

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Jiangsu Recbio Technology Co., Ltd.. It has a market capitalization of just HK$2.9b, and insiders have HK$114m worth of shares, in their own names. 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 24% stake in Jiangsu Recbio Technology. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

With a stake of 22%, private equity firms could influence the Jiangsu Recbio Technology board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

It seems that Private Companies own 17%, of the Jiangsu Recbio Technology 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Jiangsu Recbio Technology better, we need to consider many other factors. Be aware that Jiangsu Recbio Technology is showing 3 warning signs in our investment analysis , and 2 of those are concerning...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.