Nan Pao Resins Chemical Co., Ltd.'s (TWSE:4766) largest shareholders are private companies who were rewarded as market cap surged NT$1.9b last week

Key Insights

• The considerable ownership by private companies in Nan Pao Resins Chemical indicates that they collectively have a greater say in management and business strategy
• A total of 6 investors have a majority stake in the company with 56% ownership
• Institutional ownership in Nan Pao Resins Chemical is 13%

Every investor in Nan Pao Resins Chemical Co., Ltd. (TWSE:4766) should be aware of the most powerful shareholder groups. With 40% stake, private companies 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).

As a result, private companies were the biggest beneficiaries of last week’s 4.8% gain.

Let's delve deeper into each type of owner of Nan Pao Resins Chemical, beginning with the chart below.

Check out our latest analysis for Nan Pao Resins Chemical

What Does The Institutional Ownership Tell Us About Nan Pao Resins Chemical?

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.

Nan Pao Resins Chemical already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Nan Pao Resins Chemical's historic earnings and revenue below, but keep in mind there's always more to the story.

Nan Pao Resins Chemical is not owned by hedge funds. Pou Chen Corporation is currently the largest shareholder, with 18% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.2% and 8.3% of the stock. In addition, we found that Ming-Hsien Hsu, the CEO has 0.5% of the shares allocated to their name.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 Nan Pao Resins Chemical

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.

We can see that insiders own shares in Nan Pao Resins Chemical Co., Ltd.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around NT$2.0b worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Nan Pao Resins Chemical. 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 Company Ownership

It seems that Private Companies own 40%, of the Nan Pao Resins Chemical 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.

Public Company Ownership

It appears to us that public companies own 18% of Nan Pao Resins Chemical. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Nan Pao Resins Chemical better, we need to consider many other factors. Take risks for example - Nan Pao Resins Chemical has 2 warning signs we think you should be aware of.

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.