The recent 9.8% gain must have brightened CEO Zongjun Han's week, Chongqing Sulian Plastic Co.,Ltd.'s (SZSE:301397) most bullish insider

Key Insights

• Significant insider control over Chongqing Sulian PlasticLtd implies vested interests in company growth
• 54% of the business is held by the top 2 shareholders
• Institutional ownership in Chongqing Sulian PlasticLtd is 11%

Every investor in Chongqing Sulian Plastic Co.,Ltd. (SZSE:301397) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 57% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by CN¥443m last week.

In the chart below, we zoom in on the different ownership groups of Chongqing Sulian PlasticLtd.

See our latest analysis for Chongqing Sulian PlasticLtd

What Does The Institutional Ownership Tell Us About Chongqing Sulian PlasticLtd?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Chongqing Sulian PlasticLtd. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Chongqing Sulian PlasticLtd's earnings history below. Of course, the future is what really matters.

Chongqing Sulian PlasticLtd is not owned by hedge funds. The company's CEO Zongjun Han is the largest shareholder with 32% of shares outstanding. For context, the second largest shareholder holds about 22% of the shares outstanding, followed by an ownership of 2.9% by the third-largest shareholder. Interestingly, the second-largest shareholder, Xiao Han is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Chongqing Sulian PlasticLtd

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.

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 most recent data indicates that insiders own the majority of Chongqing Sulian Plastic Co.,Ltd.. This means they can collectively make decisions for the company. So they have a CN¥2.8b stake in this CN¥4.9b business. 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

With a 32% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Chongqing Sulian PlasticLtd. 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.

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 3 warning signs for Chongqing Sulian PlasticLtd you should be aware of, and 2 of them are significant.

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.