Retail investors invested in Fujian Nanwang Environment Protection Scien-Tech Co.,Ltd (SZSE:301355) copped the brunt of last week's CN¥308m market cap decline

Simply Wall St · 10/16 00:56

Key Insights

To get a sense of who is truly in control of Fujian Nanwang Environment Protection Scien-Tech Co.,Ltd (SZSE:301355), 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 42% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 13% decline in share price, retail investors suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Fujian Nanwang Environment Protection Scien-TechLtd.

Check out our latest analysis for Fujian Nanwang Environment Protection Scien-TechLtd

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SZSE:301355 Ownership Breakdown October 16th 2024

What Does The Institutional Ownership Tell Us About Fujian Nanwang Environment Protection Scien-TechLtd?

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.

Since institutions own only a small portion of Fujian Nanwang Environment Protection Scien-TechLtd, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

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SZSE:301355 Earnings and Revenue Growth October 16th 2024

Fujian Nanwang Environment Protection Scien-TechLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Kaisheng Chen with 18% of shares outstanding. Huian Huaying Investment Center (Limited Partnership) is the second largest shareholder owning 11% of common stock, and Huian Chuanghui Investment Center (Limited Partnership) holds about 5.6% of the company stock.

We did some more digging and found that 7 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Fujian Nanwang Environment Protection Scien-TechLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own a reasonable proportion of Fujian Nanwang Environment Protection Scien-Tech Co.,Ltd. It has a market capitalization of just CN¥2.1b, and insiders have CN¥391m worth of shares in their own names. 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 42% stake in Fujian Nanwang Environment Protection Scien-TechLtd. 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 Equity Ownership

With a stake of 5.5%, private equity firms could influence the Fujian Nanwang Environment Protection Scien-TechLtd 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 30%, of the Fujian Nanwang Environment Protection Scien-TechLtd stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Fujian Nanwang Environment Protection Scien-TechLtd , and understanding them should be part of your investment process.

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.