Zhejiang Rongtai Electric Material Co.,Ltd. (SHSE:603119) adds CN¥363m in market cap and insiders have a 46% stake in that gain

Key Insights

• Insiders appear to have a vested interest in Zhejiang Rongtai Electric MaterialLtd's growth, as seen by their sizeable ownership
• A total of 5 investors have a majority stake in the company with 51% ownership
• Institutions own 10% of Zhejiang Rongtai Electric MaterialLtd

If you want to know who really controls Zhejiang Rongtai Electric Material Co.,Ltd. (SHSE:603119), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 46% ownership. 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¥363m last week.

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

See our latest analysis for Zhejiang Rongtai Electric MaterialLtd

What Does The Institutional Ownership Tell Us About Zhejiang Rongtai Electric MaterialLtd?

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.

Zhejiang Rongtai Electric MaterialLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Zhejiang Rongtai Electric MaterialLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Zhejiang Rongtai Electric MaterialLtd. Looking at our data, we can see that the largest shareholder is Tairong Ge with 33% of shares outstanding. Tailiang Ge is the second largest shareholder owning 5.6% of common stock, and Ningbo Meishan Bonded Port Area Chendao Investment Partnership Enterprise (L.P.) holds about 5.4% of the company stock.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. 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 Zhejiang Rongtai Electric MaterialLtd

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own a reasonable proportion of Zhejiang Rongtai Electric Material Co.,Ltd.. Insiders own CN¥2.3b worth of shares in the CN¥5.0b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 38% stake in the company, and hence can't easily be ignored. 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 Equity Ownership

Private equity firms hold a 5.4% stake in Zhejiang Rongtai Electric MaterialLtd. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Zhejiang Rongtai Electric MaterialLtd better, we need to consider many other factors.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.