Retail investors are Shida Shinghwa Advanced Material Group Co., Ltd.'s (SHSE:603026) biggest owners and were hit after market cap dropped CN¥379m

Key Insights

• Significant control over Shida Shinghwa Advanced Material Group by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 19 shareholders own 50% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

To get a sense of who is truly in control of Shida Shinghwa Advanced Material Group Co., Ltd. (SHSE:603026), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 49% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥6.8b last week, retail investors would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Shida Shinghwa Advanced Material Group, beginning with the chart below.

See our latest analysis for Shida Shinghwa Advanced Material Group

What Does The Institutional Ownership Tell Us About Shida Shinghwa Advanced Material 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.

Shida Shinghwa Advanced Material Group 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 Shida Shinghwa Advanced Material Group, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Shida Shinghwa Advanced Material Group. The company's largest shareholder is Qingdao West Coast New Area Ronghe Holding Group Co., Ltd., with ownership of 15%. Beijing Zhehou New Energy Technology Development Co., Ltd. is the second largest shareholder owning 13% of common stock, and Qingdao Zhongshida Holdings Co., Ltd. holds about 8.3% of the company stock.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 19 shareholders, meaning that no single shareholder has a majority interest in the ownership.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Shida Shinghwa Advanced Material Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own some shares in Shida Shinghwa Advanced Material Group Co., Ltd.. It has a market capitalization of just CN¥6.8b, and insiders have CN¥102m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 49% stake in Shida Shinghwa Advanced Material Group. 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 Company Ownership

We can see that Private Companies own 44%, of the shares on issue. 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 Shida Shinghwa Advanced Material Group 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.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.