Saturday, June 15, 2024

Shenzhen Silver Basis Technology Co., Ltd.’s (SZSE:002786) stock price dropped 12% last week; retail investors would not be happy

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Key Insights

  • The considerable ownership by retail investors in Shenzhen Silver Basis Technology indicates that they collectively have a greater say in management and business strategy
  • A total of 9 investors have a majority stake in the company with 50% ownership
  • Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Shenzhen Silver Basis Technology Co., Ltd. (SZSE:002786), then you’ll have to look at the makeup of its share registry. We can see that retail investors own the lion’s share in the company with 48% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, retail investors endured the biggest losses as the stock fell by 12%.

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

See our latest analysis for Shenzhen Silver Basis Technology

SZSE:002786 Ownership Breakdown May 27th 2024

What Does The Institutional Ownership Tell Us About Shenzhen Silver Basis Technology?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Shenzhen Silver Basis Technology does have institutional investors; and they hold a good portion of the company’s stock. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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.

earnings-and-revenue-growth
SZSE:002786 Earnings and Revenue Growth May 27th 2024

Hedge funds don’t have many shares in Shenzhen Silver Basis Technology. The company’s largest shareholder is China Orient Asset Management Co., Ltd., with ownership of 27%. With 15% and 2.8% of the shares outstanding respectively, Huaian Bulade Investment Development Co., Ltd. and Beijing Huaqing Boguang Venture Capital Co., Ltd. are the second and third largest shareholders.

On further inspection, we found that more than half the company’s shares are owned by the top 9 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 Shenzhen Silver Basis Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 Shenzhen Silver Basis Technology Co., Ltd. insiders own under 1% of the company. But they may have an indirect interest through a corporate structure that we haven’t picked up on. It seems the board members have no more than CN¥18m worth of shares in the CN¥4.5b company. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public, who are usually individual investors, hold a 48% stake in Shenzhen Silver Basis 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

It seems that Private Companies own 45%, of the Shenzhen Silver Basis Technology 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. For example, we’ve discovered 3 warning signs for Shenzhen Silver Basis Technology (1 shouldn’t be ignored!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.

Valuation is complex, but we’re helping make it simple.

Find out whether Shenzhen Silver Basis Technology is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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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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