Retail investors in Shanghai Fortune Techgroup Co., Ltd. (SZSE:300493) are its biggest bettors, and their bets paid off as stock gained 4.5% last week

Simply Wall St · 10/18 23:10

Key Insights

  • Significant control over Shanghai Fortune Techgroup by retail investors implies that the general public has more power to influence management and governance-related decisions
  • A total of 25 investors have a majority stake in the company with 43% ownership
  • Institutional ownership in Shanghai Fortune Techgroup is 15%

A look at the shareholders of Shanghai Fortune Techgroup Co., Ltd. (SZSE:300493) can tell us which group is most powerful. With 57% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, retail investors collectively scored the highest last week as the company hit CN¥8.3b market cap following a 4.5% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Shanghai Fortune Techgroup.

View our latest analysis for Shanghai Fortune Techgroup

ownership-breakdown
SZSE:300493 Ownership Breakdown October 18th 2024

What Does The Institutional Ownership Tell Us About Shanghai Fortune Techgroup?

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.

As you can see, institutional investors have a fair amount of stake in Shanghai Fortune Techgroup. 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. 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 Shanghai Fortune Techgroup's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
SZSE:300493 Earnings and Revenue Growth October 18th 2024

We note that hedge funds don't have a meaningful investment in Shanghai Fortune Techgroup. Shanghai Fortune Information Technology Co., Ltd. is currently the company's largest shareholder with 21% of shares outstanding. With 5.9% and 5.0% of the shares outstanding respectively, Lingyuan Investment Advisory (Shanghai) Co., Ltd. and Shanghai Axing Investment Management Co., Ltd. are the second and third largest shareholders.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Shanghai Fortune Techgroup

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

Our information suggests that Shanghai Fortune Techgroup Co., Ltd. insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around CN¥57m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public -- including retail investors -- own 57% of Shanghai Fortune Techgroup. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

It seems that Private Companies own 27%, of the Shanghai Fortune Techgroup 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 Shanghai Fortune Techgroup you should be aware of.

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.