Key Insights

• Capitalonline Data Service's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 46% of the business is held by the top 25 shareholders
• Insider ownership in Capitalonline Data Service is 30%

To get a sense of who is truly in control of Capitalonline Data Service Co., Ltd. (SZSE:300846), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 53% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 9.5% decrease in the stock price last week, individual investors suffered the most losses, but insiders who own 30% stock also took a hit.

Let's take a closer look to see what the different types of shareholders can tell us about Capitalonline Data Service.

What Does The Institutional Ownership Tell Us About Capitalonline Data Service?

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.

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

Capitalonline Data Service is not owned by hedge funds. Our data shows that Ning Qu is the largest shareholder with 24% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.3% and 2.0%, of the shares outstanding, respectively. Yongzhi Zhao, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive.

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. 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 Capitalonline Data Service

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own a reasonable proportion of Capitalonline Data Service Co., Ltd.. Insiders have a CN¥1.3b stake in this CN¥4.6b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public -- including retail investors -- own 53% of Capitalonline Data Service. 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

It seems that Private Companies own 3.9%, of the Capitalonline Data Service stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private 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. Take risks for example - Capitalonline Data Service has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.

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.