Key Insights

• Shenzhen Silver Basis Technology's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 49% of the business is held by the top 22 shareholders
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Shenzhen Silver Basis Technology Co., Ltd. (SZSE:002786) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 51% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, individual investors collectively scored the highest last week as the company hit CN¥6.0b market cap following a 14% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Shenzhen Silver Basis Technology.

What Does The Institutional Ownership Tell Us About Shenzhen Silver Basis 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.

Shenzhen Silver Basis Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Shenzhen Silver Basis Technology's earnings history below. Of course, the future is what really matters.

Shenzhen Silver Basis Technology is not owned by hedge funds. The company's largest shareholder is China Orient Asset Management Co., Ltd., with ownership of 27%. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 2.8% by the third-largest shareholder.

On studying our ownership data, we found that 22 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. 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 Shenzhen Silver Basis Technology

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

Our most recent data indicates that insiders own less than 1% of Shenzhen Silver Basis Technology Co., Ltd.. However, it's possible that insiders might have an indirect interest through a more complex structure. It appears that the board holds about CN¥24m worth of stock. This compares to a market capitalization of CN¥6.0b. 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 substantial 51% stake in Shenzhen Silver Basis Technology, suggesting it is a fairly popular stock. 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

We can see that Private Companies own 43%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Shenzhen Silver Basis Technology better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Shenzhen Silver Basis Technology (of which 2 are a bit unpleasant!) you should know about.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.