Insiders with their considerable ownership were the key benefactors as Jiangsu Rongtai Industry Co., Ltd. (SHSE:605133) touches CN¥3.9b market cap

Key Insights

• Jiangsu Rongtai Industry's significant insider ownership suggests inherent interests in company's expansion
• 60% of the company is held by a single shareholder (Chengliang Xia)
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

To get a sense of who is truly in control of Jiangsu Rongtai Industry Co., Ltd. (SHSE:605133), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 60% to be precise, is individual insiders. 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, insiders scored the highest last week as the company hit CN¥3.9b market cap following a 19% gain in the stock.

Let's delve deeper into each type of owner of Jiangsu Rongtai Industry, beginning with the chart below.

See our latest analysis for Jiangsu Rongtai Industry

What Does The Institutional Ownership Tell Us About Jiangsu Rongtai Industry?

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.

We can see that Jiangsu Rongtai Industry does have institutional investors; and they hold a good portion of the company's stock. 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 Jiangsu Rongtai Industry, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Jiangsu Rongtai Industry. Looking at our data, we can see that the largest shareholder is Chengliang Xia with 60% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 4.9% and 3.1% of the shares outstanding respectively, Yangzhou Jiajie Equity Investment Partnership Enterprise (Limited Partnership) and National Council for Social Security Fund are the second and third largest shareholders.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Jiangsu Rongtai Industry

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 that insiders own more than half the Jiangsu Rongtai Industry Co., Ltd. stock. This gives them a lot of power. That means they own CN¥2.4b worth of shares in the CN¥3.9b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 26% stake in Jiangsu Rongtai Industry. 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

We can see that Private Companies own 5.2%, of the shares on issue. 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:

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. Case in point: We've spotted 2 warning signs for Jiangsu Rongtai Industry you should be aware of, and 1 of them is potentially serious.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.