Retail Investors Among QingCloud Technologies Corp.'s (SHSE:688316) Largest Stockholders and Were Hit After Last Week's 14% Price Drop

Simply Wall St · Nov 28, 2023 10:57

Key Insights

Significant control over QingCloud Technologies by retail investors implies that the general public has more power to influence management and governance-related decisions
The top 10 shareholders own 50% of the company
Insider ownership in QingCloud Technologies is 24%

To get a sense of who is truly in control of QingCloud Technologies Corp. (SHSE:688316), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 39% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 14% decrease in the stock price last week, retail investors suffered the most losses, but insiders who own 24% stock also took a hit.

In the chart below, we zoom in on the different ownership groups of QingCloud Technologies.

Check out our latest analysis for QingCloud Technologies

ownership-breakdown — SHSE:688316 Ownership Breakdown November 28th 2023

What Does The Institutional Ownership Tell Us About QingCloud Technologies?

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.

As you can see, institutional investors have a fair amount of stake in QingCloud Technologies. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see QingCloud Technologies' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth — SHSE:688316 Earnings and Revenue Growth November 28th 2023

QingCloud Technologies is not owned by hedge funds. The company's CEO Yunsong Huang is the largest shareholder with 14% of shares outstanding. BlueRun Investment Consulting (Shanghai) Co., Ltd. is the second largest shareholder owning 10% of common stock, and Beijing Rongpei Capital Management Co., Ltd. holds about 6.5% of the company stock.

We did some more digging and found that 10 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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

Insider Ownership Of QingCloud Technologies

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders maintain a significant holding in QingCloud Technologies Corp.. It has a market capitalization of just CN¥2.6b, and insiders have CN¥613m 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, who are usually individual investors, hold a 39% stake in QingCloud Technologies. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Equity Ownership

With a stake of 17%, private equity firms could influence the QingCloud Technologies board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 2 warning signs for QingCloud Technologies 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.

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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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