Jiangsu Rongtai Industry Co., Ltd. (SHSE:605133) adds CN¥457m in market cap and insiders have a 60% stake in that gain

Key Insights

• Insiders appear to have a vested interest in Jiangsu Rongtai Industry's growth, as seen by their sizeable ownership
• 60% of the company is held by a single shareholder (Chengliang Xia)
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

Every investor in Jiangsu Rongtai Industry Co., Ltd. (SHSE:605133) should be aware of the most powerful shareholder groups. 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).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥457m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Jiangsu Rongtai Industry.

View our latest analysis for Jiangsu Rongtai Industry

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

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Jiangsu Rongtai Industry. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Jiangsu Rongtai Industry's earnings history below. Of course, the future is what really matters.

Jiangsu Rongtai Industry is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Chengliang Xia with 60% of shares outstanding. This implies that they have majority interest 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.

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. 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

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our information suggests that insiders own more than half of Jiangsu Rongtai Industry Co., Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥4.6b, that means they have CN¥2.8b worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 28% stake in Jiangsu Rongtai Industry. 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

Our data indicates that Private Companies hold 5.2%, of the company's shares. 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. For example, we've discovered 2 warning signs for Jiangsu Rongtai Industry 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.