Profit Cultural and Creative Group Co., Ltd.'s (SZSE:300640) 11% gain last week benefited both retail investors who own 49% as well as insiders

Key Insights

• The considerable ownership by retail investors in Profit Cultural and Creative Group indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 15 shareholders
• 46% of Profit Cultural and Creative Group is held by insiders

To get a sense of who is truly in control of Profit Cultural and Creative Group Co., Ltd. (SZSE:300640), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 49% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While retail investors were the group that reaped the most benefits after last week’s 11% price gain, insiders also received a 46% cut.

Let's delve deeper into each type of owner of Profit Cultural and Creative Group, beginning with the chart below.

See our latest analysis for Profit Cultural and Creative Group

What Does The Institutional Ownership Tell Us About Profit Cultural and Creative Group?

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 Profit Cultural and Creative Group. 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 Profit Cultural and Creative Group's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Profit Cultural and Creative Group. Our data shows that Steven Wu is the largest shareholder with 40% of shares outstanding. In comparison, the second and third largest shareholders hold about 2.1% and 1.2% of the stock.

A closer look at our ownership figures suggests that the top 15 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Profit Cultural and Creative Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 Profit Cultural and Creative Group Co., Ltd.. Insiders own CN¥637m worth of shares in the CN¥1.4b 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 Profit Cultural and Creative Group. 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.

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. To that end, you should learn about the 3 warning signs we've spotted with Profit Cultural and Creative Group (including 2 which are concerning) .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.