Insiders were the key beneficiaries as Zhejiang Xiantong Rubber&Plastic Co.,Ltd's (SHSE:603239) market cap rises to CN¥3.5b

Key Insights

• Significant insider control over Zhejiang Xiantong Rubber&PlasticLtd implies vested interests in company growth
• A total of 2 investors have a majority stake in the company with 53% ownership
• Institutions own 12% of Zhejiang Xiantong Rubber&PlasticLtd

Every investor in Zhejiang Xiantong Rubber&Plastic Co.,Ltd (SHSE:603239) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 35% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 12% gain.

Let's delve deeper into each type of owner of Zhejiang Xiantong Rubber&PlasticLtd, beginning with the chart below.

View our latest analysis for Zhejiang Xiantong Rubber&PlasticLtd

What Does The Institutional Ownership Tell Us About Zhejiang Xiantong Rubber&PlasticLtd?

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.

Zhejiang Xiantong Rubber&PlasticLtd 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 Zhejiang Xiantong Rubber&PlasticLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Zhejiang Xiantong Rubber&PlasticLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Taizhou Wucheng Industrial Development Co., Ltd. with 29% of shares outstanding. For context, the second largest shareholder holds about 24% of the shares outstanding, followed by an ownership of 7.1% by the third-largest shareholder. Gui Yin Jin, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Zhejiang Xiantong Rubber&PlasticLtd

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. 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.

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.

It seems insiders own a significant proportion of Zhejiang Xiantong Rubber&Plastic Co.,Ltd. It has a market capitalization of just CN¥3.5b, and insiders have CN¥1.2b 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 24% 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

We can see that Private Companies own 29%, of the shares on issue. 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. To that end, you should be aware of the 1 warning sign we've spotted with Zhejiang Xiantong Rubber&PlasticLtd .

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.