Montnets Cloud Technology Group Co., Ltd.'s (SZSE:002123) market cap touched CN¥8.5b last week, benefiting both retail investors who own 56% as well as institutions

Key Insights

• Significant control over Montnets Cloud Technology Group by retail investors implies that the general public has more power to influence management and governance-related decisions
• 44% of the business is held by the top 25 shareholders
• 14% of Montnets Cloud Technology Group is held by insiders

To get a sense of who is truly in control of Montnets Cloud Technology Group Co., Ltd. (SZSE:002123), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 56% 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).

While retail investors were the group that reaped the most benefits after last week’s 12% price gain, institutions also received a 26% cut.

Let's take a closer look to see what the different types of shareholders can tell us about Montnets Cloud Technology Group.

Check out our latest analysis for Montnets Cloud Technology Group

What Does The Institutional Ownership Tell Us About Montnets Cloud Technology Group?

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 Montnets Cloud Technology Group. 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 Montnets Cloud Technology Group's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Montnets Cloud Technology Group. The company's largest shareholder is Wensheng Yu, with ownership of 14%. With 6.6% and 4.3% of the shares outstanding respectively, Foresight Fund Management Company and Shenzhen Songhe Venture Capital Co., Ltd. are the second and third largest shareholders.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Montnets Cloud Technology Group

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders maintain a significant holding in Montnets Cloud Technology Group Co., Ltd.. It has a market capitalization of just CN¥8.5b, and insiders have CN¥1.2b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 56% of Montnets Cloud Technology Group shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.