Both retail investors who control a good portion of NBTM New Materials Group Co., Ltd. (SHSE:600114) along with institutions must be dismayed after last week's 15% decrease

Key Insights

• Significant control over NBTM New Materials Group by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 24 shareholders own 50% of the company
• 28% of NBTM New Materials Group is held by Institutions

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To get a sense of who is truly in control of NBTM New Materials Group Co., Ltd. (SHSE:600114), it is important to understand the ownership structure of the business. With 46% stake, retail 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 15% decrease in the stock price last week, retail investors suffered the most losses, but institutions who own 28% stock also took a hit.

Let's delve deeper into each type of owner of NBTM New Materials Group, beginning with the chart below.

Check out our latest analysis for NBTM New Materials Group

What Does The Institutional Ownership Tell Us About NBTM New Materials Group?

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.

NBTM New Materials Group 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 NBTM New Materials Group, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in NBTM New Materials Group. Looking at our data, we can see that the largest shareholder is Mu Special Industrial Corporation of Metal with 11% of shares outstanding. With 8.3% and 4.9% of the shares outstanding respectively, Ningbo Jinguang Investment Co., Ltd. and Ningbo Xinjinguang Investment Management Co., Ltd. are the second and third largest shareholders.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 24 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of NBTM New Materials Group

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. 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.

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.

We can see that insiders own shares in NBTM New Materials Group Co., Ltd.. The insiders have a meaningful stake worth CN¥247m. Most would see this as a real positive. Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 46% stake in the company, and hence can't easily be ignored. 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 24%, of the NBTM New Materials Group stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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 NBTM New Materials Group (1 doesn't sit too well with us!) that you should be aware of before investing here.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.