Retail investors among Wintao Communications Co., Ltd.'s (SZSE:301139) largest stockholders and were hit after last week's 16% price drop

Simply Wall St · 10/16 00:44

Key Insights

  • Wintao Communications' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
  • A total of 8 investors have a majority stake in the company with 51% ownership
  • Insider ownership in Wintao Communications is 39%

A look at the shareholders of Wintao Communications Co., Ltd. (SZSE:301139) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders, who own 39% shares weren’t spared from last week’s CN¥508m market cap drop, retail investors as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of Wintao Communications.

View our latest analysis for Wintao Communications

ownership-breakdown
SZSE:301139 Ownership Breakdown October 16th 2024

What Does The Institutional Ownership Tell Us About Wintao Communications?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Wintao Communications does have institutional investors; and they hold a good portion of the company's stock. 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 Wintao Communications' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
SZSE:301139 Earnings and Revenue Growth October 16th 2024

We note that hedge funds don't have a meaningful investment in Wintao Communications. The company's largest shareholder is Jin Li, with ownership of 27%. Hong Yan is the second largest shareholder owning 6.6% of common stock, and Zhifeng Wu holds about 5.2% of the company stock.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 Wintao Communications

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. 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.

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.

It seems insiders own a significant proportion of Wintao Communications Co., Ltd.. Insiders have a CN¥1.1b stake in this CN¥2.7b 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, who are usually individual investors, hold a 46% stake in Wintao Communications. 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 Company Ownership

Our data indicates that Private Companies hold 6.4%, of the company's shares. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Wintao Communications (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. So take a peek at this free 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.