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The Recent CN¥472m Market Cap Decrease Is Likely to Have Disappointed Insiders Invested in Suzhou Sunmun Technology Co., Ltd. (SZSE:300522)

Simply Wall St ·  09/22 07:50

To get a sense of who is truly in control of Suzhou Sunmun Technology Co., Ltd. (SZSE:300522), it is important to understand the ownership structure of the business. With 54% stake, individual insiders 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).

And following last week's 13% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Suzhou Sunmun Technology.

See our latest analysis for Suzhou Sunmun Technology

ownership-breakdownSZSE:300522 Ownership Breakdown September 21st 2022

What Does The Institutional Ownership Tell Us About Suzhou Sunmun 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.

Since institutions own only a small portion of Suzhou Sunmun Technology, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. 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.

earnings-and-revenue-growthSZSE:300522 Earnings and Revenue Growth September 21st 2022

Suzhou Sunmun Technology is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Shi Ming Lu with 49% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 3.8% and 2.7%, of the shares outstanding, respectively. Furthermore, CEO Jin Chen is the owner of 0.7% of the company's shares.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.

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 Suzhou Sunmun Technology

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.

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 information suggests that insiders own more than half of Suzhou Sunmun Technology Co., Ltd.. This gives them effective control of the company. So they have a CN¥1.8b stake in this CN¥3.2b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 37% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Suzhou Sunmun Technology. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 5.7%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Suzhou Sunmun Technology better, we need to consider many other factors. Be aware that Suzhou Sunmun Technology is showing 2 warning signs in our investment analysis , 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.

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