Individual investors are Canggang Railway Limited's (HKG:2169) biggest owners and were hit after market cap dropped HK$359m

Key Insights

• Significant control over Canggang Railway by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 10 shareholders own 48% of the company
• Insiders own 42% of Canggang Railway

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If you want to know who really controls Canggang Railway Limited (HKG:2169), then you'll have to look at the makeup of its share registry. With 52% stake, individual investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders, who own 42% shares weren’t spared from last week’s HK$359m market cap drop, individual investors as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of Canggang Railway.

Check out our latest analysis for Canggang Railway

What Does The Institutional Ownership Tell Us About Canggang Railway?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Less than 5% of Canggang Railway is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Canggang Railway is not owned by hedge funds. Our data suggests that Yongliang Liu, who is also the company's Top 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 2.8% and 1.8% of the stock. Interestingly, the third-largest shareholder, Weiming Yi is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

On studying our ownership data, we found that 10 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Canggang Railway

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

It seems insiders own a significant proportion of Canggang Railway Limited. It has a market capitalization of just HK$2.9b, and insiders have HK$1.2b 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, mostly comprising of individual investors, collectively holds 52% of Canggang Railway shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Canggang Railway better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Canggang Railway (including 2 which don't sit too well with us) .

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.