Chongqing Xishan Science & Technology Co., Ltd.'s (SHSE:688576) largest shareholder, Senior Key Executive Yijun Guo sees holdings value fall by 16% following recent drop

Simply Wall St · 10/16 00:53

Key Insights

To get a sense of who is truly in control of Chongqing Xishan Science & Technology Co., Ltd. (SHSE:688576), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 40% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, insiders endured the biggest losses as the stock fell by 16%.

In the chart below, we zoom in on the different ownership groups of Chongqing Xishan Science & Technology.

See our latest analysis for Chongqing Xishan Science & Technology

ownership-breakdown
SHSE:688576 Ownership Breakdown October 16th 2024

What Does The Institutional Ownership Tell Us About Chongqing Xishan Science & 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.

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

earnings-and-revenue-growth
SHSE:688576 Earnings and Revenue Growth October 16th 2024

Chongqing Xishan Science & Technology is not owned by hedge funds. Our data suggests that Yijun Guo, who is also the company's Senior Key Executive, holds the most number of shares at 40%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. In comparison, the second and third largest shareholders hold about 4.5% and 3.8% of the stock.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Chongqing Xishan Science & Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Our information suggests that insiders maintain a significant holding in Chongqing Xishan Science & Technology Co., Ltd.. Insiders have a CN¥1.3b stake in this CN¥3.4b 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 28% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

It seems that Private Companies own 8.5%, of the Chongqing Xishan Science & Technology stock. 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 Chongqing Xishan Science & Technology better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Chongqing Xishan Science & Technology (of which 1 is a bit concerning!) you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.