Cec Environmental Protection Co.,Ltd's (SZSE:300172) Stock Price Dropped 17% Last Week; Individual Investors Would Not Be Happy

Simply Wall St ·  Feb 1 21:00

Key Insights

  • Cec Environmental ProtectionLtd's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
  • The top 22 shareholders own 41% of the company
  • Insiders own 39% of Cec Environmental ProtectionLtd

A look at the shareholders of Cec Environmental Protection Co.,Ltd (SZSE:300172) can tell us which group is most powerful. With 59% stake, individual investors 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).

Following a 17% decrease in the stock price last week, individual investors suffered the most losses, but insiders who own 39% stock also took a hit.

Let's delve deeper into each type of owner of Cec Environmental ProtectionLtd, beginning with the chart below.

SZSE:300172 Ownership Breakdown February 2nd 2024

What Does The Institutional Ownership Tell Us About Cec Environmental ProtectionLtd?

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.

Less than 5% of Cec Environmental ProtectionLtd is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

SZSE:300172 Earnings and Revenue Growth February 2nd 2024

Hedge funds don't have many shares in Cec Environmental ProtectionLtd. Zhengfu Wang is currently the company's largest shareholder with 28% of shares outstanding. With 3.5% and 1.5% of the shares outstanding respectively, Huisheng Lin and Laisong Zhu are the second and third largest shareholders. Laisong Zhu, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

Our studies suggest that the top 22 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 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. 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 Cec Environmental ProtectionLtd

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. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders maintain a significant holding in Cec Environmental Protection Co.,Ltd. Insiders have a CN¥1.2b stake in this CN¥3.2b 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, who are usually individual investors, hold a substantial 59% stake in Cec Environmental ProtectionLtd, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

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 - Cec Environmental ProtectionLtd has 3 warning signs (and 1 which makes us a bit uncomfortable) we think 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.

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