Key Insights

• The considerable ownership by retail investors in Shenzhen Emperor Technology indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 47% of the company
• 40% of Shenzhen Emperor Technology is held by insiders

Every investor in Shenzhen Emperor Technology Co., Ltd. (SZSE:300546) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 53% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders who own 40% came under pressure after market cap dropped to CN¥2.0b last week,retail investors took the most losses.

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

What Does The Institutional Ownership Tell Us About Shenzhen Emperor 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 Emperor 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. 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 Shenzhen Emperor Technology, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Shenzhen Emperor Technology. Jing Gao is currently the company's largest shareholder with 32% of shares outstanding. Song Zheng is the second largest shareholder owning 5.7% of common stock, and Invesco Great Wall Fund Management Co. Ltd holds about 2.7% of the company stock. Song Zheng, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Shenzhen Emperor 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.

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 Shenzhen Emperor Technology Co., Ltd.. It has a market capitalization of just CN¥2.0b, and insiders have CN¥819m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 53% of Shenzhen Emperor Technology. 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.

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 - Shenzhen Emperor Technology has 2 warning signs we think you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.