Yangzhou Seashine New Materials Co.,Ltd. (SZSE:300885) adds CN¥201m in market cap and insiders have a 58% stake in that gain

Key Insights

• Significant insider control over Yangzhou Seashine New MaterialsLtd implies vested interests in company growth
• 56% of the company is held by a single shareholder (Guangrong Zhou)
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Yangzhou Seashine New Materials Co.,Ltd. (SZSE:300885), 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 individual insiders with 58% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 10% gain.

In the chart below, we zoom in on the different ownership groups of Yangzhou Seashine New MaterialsLtd.

See our latest analysis for Yangzhou Seashine New MaterialsLtd

What Does The Institutional Ownership Tell Us About Yangzhou Seashine New MaterialsLtd?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Since institutions own only a small portion of Yangzhou Seashine New MaterialsLtd, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Yangzhou Seashine New MaterialsLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Guangrong Zhou with 56% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 7.2% and 0.7%, of the shares outstanding, respectively.

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 Yangzhou Seashine New MaterialsLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 most recent data indicates that insiders own the majority of Yangzhou Seashine New Materials Co.,Ltd.. This means they can collectively make decisions for the company. So they have a CN¥1.3b stake in this CN¥2.2b business. 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-- including retail investors -- own 32% 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 7.2% stake in Yangzhou Seashine New MaterialsLtd. 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 Yangzhou Seashine New MaterialsLtd better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Yangzhou Seashine New MaterialsLtd (including 2 which are concerning) .

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.