Individual investors among Ningbo Kangqiang Electronics Co., Ltd's (SZSE:002119) largest shareholders, saw gain in holdings value after stock jumped 7.6% last week

Simply Wall St · 10/18 22:24

Key Insights

  • Significant control over Ningbo Kangqiang Electronics by individual investors implies that the general public has more power to influence management and governance-related decisions
  • The top 23 shareholders own 40% of the company
  • Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Ningbo Kangqiang Electronics Co., Ltd (SZSE:002119), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 60% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, individual investors were the biggest beneficiaries of last week’s 7.6% gain.

Let's delve deeper into each type of owner of Ningbo Kangqiang Electronics, beginning with the chart below.

See our latest analysis for Ningbo Kangqiang Electronics

ownership-breakdown
SZSE:002119 Ownership Breakdown October 18th 2024

What Does The Institutional Ownership Tell Us About Ningbo Kangqiang Electronics?

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.

Ningbo Kangqiang Electronics already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Ningbo Kangqiang Electronics' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
SZSE:002119 Earnings and Revenue Growth October 18th 2024

We note that hedge funds don't have a meaningful investment in Ningbo Kangqiang Electronics. Looking at our data, we can see that the largest shareholder is Zhejiang Yinbao IOT Technology Co., Ltd. with 20% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.5% and 5.0%, of the shares outstanding, respectively.

On studying our ownership data, we found that 23 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. 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 Ningbo Kangqiang Electronics

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 most recent data indicates that insiders own some shares in Ningbo Kangqiang Electronics Co., Ltd. It has a market capitalization of just CN¥5.0b, and insiders have CN¥209m worth of shares, in their own names. This shows at least some alignment. 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 60% of Ningbo Kangqiang Electronics 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.

Private Company Ownership

It seems that Private Companies own 27%, of the Ningbo Kangqiang Electronics 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. Case in point: We've spotted 1 warning sign for Ningbo Kangqiang Electronics you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.