Rastar Group's (SZSE:300043) market cap rose CN¥857m last week; retail investors who hold 51% profited and so did insiders

Key Insights

• The considerable ownership by retail investors in Rastar Group indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 48% ownership
• 35% of Rastar Group is held by insiders

If you want to know who really controls Rastar Group (SZSE:300043), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Retail investors gained the most after market cap touched CN¥3.9b last week, while insiders who own 35% also benefitted.

In the chart below, we zoom in on the different ownership groups of Rastar Group.

Check out our latest analysis for Rastar Group

What Does The Institutional Ownership Tell Us About Rastar Group?

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.

We can see that Rastar Group 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. 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 Rastar Group's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Rastar Group. The company's largest shareholder is Yan Sheng Chen, with ownership of 33%. With 2.5% and 1.9% of the shares outstanding respectively, Zhuhai Ruifeng Huibang Asset Management Co., Ltd. and Dongqiong Chen are the second and third largest shareholders.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. 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 Rastar Group

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.

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.

Our information suggests that insiders maintain a significant holding in Rastar Group. Insiders own CN¥1.3b worth of shares in the CN¥3.9b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 51% stake in Rastar Group, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Rastar Group better, we need to consider many other factors. Be aware that Rastar Group is showing 3 warning signs in our investment analysis , you should know about...

Of course this may not be the best stock to buy. So take a peek at this free 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.