Key Insights

• Significant control over Nanjing Canatal Data-Centre Environmental Tech by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 5 shareholders own 50% of the company
• 14% of Nanjing Canatal Data-Centre Environmental Tech is held by Institutions

A look at the shareholders of Nanjing Canatal Data-Centre Environmental Tech Co., Ltd (SHSE:603912) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 45% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, private companies benefitted the most after the company's market cap rose by CN¥591m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Nanjing Canatal Data-Centre Environmental Tech.

What Does The Institutional Ownership Tell Us About Nanjing Canatal Data-Centre Environmental Tech?

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.

We can see that Nanjing Canatal Data-Centre Environmental Tech does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Nanjing Canatal Data-Centre Environmental Tech's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Nanjing Canatal Data-Centre Environmental Tech. The company's largest shareholder is Najing Kaide Investment Co., Ltd., with ownership of 29%. Meanwhile, the second and third largest shareholders, hold 16% and 2.1%, of the shares outstanding, respectively.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Nanjing Canatal Data-Centre Environmental Tech

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

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 Nanjing Canatal Data-Centre Environmental Tech Co., Ltd insiders own under 1% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. It appears that the board holds about CN¥16m worth of stock. This compares to a market capitalization of CN¥4.0b. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 41% stake in Nanjing Canatal Data-Centre Environmental Tech. 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 Company Ownership

We can see that Private Companies own 45%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 4 warning signs for Nanjing Canatal Data-Centre Environmental Tech (1 is significant) that 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.

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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.