Recent 14% pullback would hurt Xinyaqiang Silicon Chemistry Co.,Ltd (SHSE:603155) insiders

Key Insights

• Xinyaqiang Silicon ChemistryLtd's significant insider ownership suggests inherent interests in company's expansion
• The top 2 shareholders own 59% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Xinyaqiang Silicon Chemistry Co.,Ltd (SHSE:603155) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 54% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, insiders endured the biggest losses as the stock fell by 14%.

Let's take a closer look to see what the different types of shareholders can tell us about Xinyaqiang Silicon ChemistryLtd.

See our latest analysis for Xinyaqiang Silicon ChemistryLtd

What Does The Institutional Ownership Tell Us About Xinyaqiang Silicon ChemistryLtd?

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.

Xinyaqiang Silicon ChemistryLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Xinyaqiang Silicon ChemistryLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Xinyaqiang Silicon ChemistryLtd. Looking at our data, we can see that the largest shareholder is Lin Chu with 46% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 13% and 7.3%, of the shares outstanding, respectively. Additionally, the company's CEO Yajun Chu directly holds 1.5% of the total shares outstanding.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. 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 Xinyaqiang Silicon ChemistryLtd

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.

Our most recent data indicates that insiders own the majority of Xinyaqiang Silicon Chemistry Co.,Ltd. This means they can collectively make decisions for the company. So they have a CN¥1.7b stake in this CN¥3.2b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Xinyaqiang Silicon ChemistryLtd. 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

With a stake of 20%, private equity firms could influence the Xinyaqiang Silicon ChemistryLtd board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Xinyaqiang Silicon ChemistryLtd better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Xinyaqiang Silicon ChemistryLtd (of which 1 is significant!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.