Key Insights

• The considerable ownership by individual investors in Chengdu RML Technology indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 48% of the company
• Insider ownership in Chengdu RML Technology is 29%

A look at the shareholders of Chengdu RML Technology Co., Ltd. (SZSE:301050) can tell us which group is most powerful. The group holding the most number of shares in the company, around 51% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 6.4% decrease in the stock price last week, individual investors suffered the most losses, but insiders who own 29% stock also took a hit.

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

What Does The Institutional Ownership Tell Us About Chengdu RML Technology?

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.

We can see that Chengdu RML Technology 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Chengdu RML Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Chengdu RML Technology. Jieru Deng is currently the company's largest shareholder with 20% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.1% and 3.7% of the stock.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Chengdu RML Technology

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.

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.

It seems insiders own a significant proportion of Chengdu RML Technology Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥3.6b stake in this CN¥13b business. 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 51% of Chengdu RML Technology 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.

Private Company Ownership

Our data indicates that Private Companies hold 10%, of the company's shares. 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. Take risks for example - Chengdu RML Technology has 1 warning sign we think 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.

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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.