Xinyaqiang Silicon Chemistry Co.,Ltd's (SHSE:603155) CEO Lin Chu is the most upbeat insider, and their holdings increased by 19% last week

Key Insights

• Significant insider control over Xinyaqiang Silicon ChemistryLtd implies vested interests in company growth
• 59% of the business is held by the top 2 shareholders
• 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. With 54% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders were the biggest beneficiaries of last week’s 19% gain.

Let's delve deeper into each type of owner of Xinyaqiang Silicon ChemistryLtd, beginning with the chart below.

See our latest analysis for Xinyaqiang Silicon ChemistryLtd

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

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Xinyaqiang Silicon ChemistryLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Xinyaqiang Silicon ChemistryLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Xinyaqiang Silicon ChemistryLtd. With a 46% stake, CEO Lin Chu is the largest shareholder. With 13% and 7.3% of the shares outstanding respectively, Hongta Innovation (Kunshan) Venture Capital Co., Ltd. and Hongta Innovation Investment Co., Ltd. are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 59% stake.

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. 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 company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 information suggests that insiders own more than half of Xinyaqiang Silicon Chemistry Co.,Ltd. This gives them effective control of the company. Given it has a market cap of CN¥5.0b, that means they have CN¥2.7b worth of shares. 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 20% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With an ownership of 20%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Xinyaqiang Silicon ChemistryLtd is showing 4 warning signs in our investment analysis , and 2 of those are a bit unpleasant...

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.