Retail investors among Nantong Jiangshan Agrochemical & Chemicals Co.,Ltd.'s (SHSE:600389) largest stockholders and were hit after last week's 6.0% price drop

Key Insights

• Nantong Jiangshan Agrochemical & ChemicalsLtd's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 47% of the business is held by the top 25 shareholders
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of Nantong Jiangshan Agrochemical & Chemicals Co.,Ltd. (SHSE:600389) can tell us which group is most powerful. The group holding the most number of shares in the company, around 53% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥5.9b last week, retail investors would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Nantong Jiangshan Agrochemical & ChemicalsLtd.

Check out our latest analysis for Nantong Jiangshan Agrochemical & ChemicalsLtd

What Does The Institutional Ownership Tell Us About Nantong Jiangshan Agrochemical & ChemicalsLtd?

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 Nantong Jiangshan Agrochemical & ChemicalsLtd. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Nantong Jiangshan Agrochemical & ChemicalsLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Nantong Jiangshan Agrochemical & ChemicalsLtd is not owned by hedge funds. Our data shows that Nantong Industries Holding Group Co.Ltd. is the largest shareholder with 29% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.9% and 2.0%, of the shares outstanding, respectively.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Nantong Jiangshan Agrochemical & ChemicalsLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

Shareholders would probably be interested to learn that insiders own shares in Nantong Jiangshan Agrochemical & Chemicals Co.,Ltd.. In their own names, insiders own CN¥113m worth of stock in the CN¥5.9b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 53% stake in Nantong Jiangshan Agrochemical & ChemicalsLtd, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

It seems that Private Companies own 35%, of the Nantong Jiangshan Agrochemical & ChemicalsLtd stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Nantong Jiangshan Agrochemical & ChemicalsLtd better, we need to consider many other factors. Take risks for example - Nantong Jiangshan Agrochemical & ChemicalsLtd has 3 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.