Fujian Supertch Advanced Material CO.,Ltd.'s (SHSE:688398) top holders are insiders and they are likely disappointed by the recent 10% drop

Key Insights

• Fujian Supertch Advanced MaterialLtd's significant insider ownership suggests inherent interests in company's expansion
• The top 2 shareholders own 52% of the company
• Institutional ownership in Fujian Supertch Advanced MaterialLtd is 11%

To get a sense of who is truly in control of Fujian Supertch Advanced Material CO.,Ltd. (SHSE:688398), it is important to understand the ownership structure of the business. With 53% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 10% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of Fujian Supertch Advanced MaterialLtd, beginning with the chart below.

Check out our latest analysis for Fujian Supertch Advanced MaterialLtd

What Does The Institutional Ownership Tell Us About Fujian Supertch Advanced MaterialLtd?

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.

Fujian Supertch Advanced 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. 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 Fujian Supertch Advanced MaterialLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Fujian Supertch Advanced MaterialLtd. Kunming Wang is currently the largest shareholder, with 43% of shares outstanding. With 8.3% and 4.2% of the shares outstanding respectively, Meilan Wang and GF Fund Management Co., Ltd. are the second and third largest shareholders.

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 Fujian Supertch Advanced MaterialLtd

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.

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 information suggests that insiders own more than half of Fujian Supertch Advanced Material CO.,Ltd.. This gives them effective control of the company. That means they own CN¥1.2b worth of shares in the CN¥2.3b company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 36% 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Fujian Supertch Advanced MaterialLtd better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Fujian Supertch Advanced MaterialLtd (including 1 which is potentially serious) .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.