Anhui Guangxin Agrochemical Co., Ltd.'s (SHSE:603599) last week's 4.2% decline must have disappointed retail investors who have a significant stake

Key Insights

• The considerable ownership by retail investors in Anhui Guangxin Agrochemical indicates that they collectively have a greater say in management and business strategy
• The top 9 shareholders own 50% of the company
• Institutions own 11% of Anhui Guangxin Agrochemical

Every investor in Anhui Guangxin Agrochemical Co., Ltd. (SHSE:603599) should be aware of the most powerful shareholder groups. With 47% stake, retail investors 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, retail investors as a group endured the highest losses last week after market cap fell by CN¥473m.

Let's delve deeper into each type of owner of Anhui Guangxin Agrochemical, beginning with the chart below.

See our latest analysis for Anhui Guangxin Agrochemical

What Does The Institutional Ownership Tell Us About Anhui Guangxin Agrochemical?

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.

As you can see, institutional investors have a fair amount of stake in Anhui Guangxin Agrochemical. 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 Anhui Guangxin Agrochemical, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Anhui Guangxin Agrochemical. Looking at our data, we can see that the largest shareholder is Anhui Guangxin Group Co., Ltd. with 39% of shares outstanding. With 4.1% and 3.1% of the shares outstanding respectively, Invesco Great Wall Fund Management Co. Ltd and Jin Xiang Huang are the second and third largest shareholders. Jin Xiang Huang, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

We also observed that the top 9 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 Anhui Guangxin Agrochemical

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own some shares in Anhui Guangxin Agrochemical Co., Ltd.. This is a big company, so it is good to see this level of alignment. Insiders own CN¥336m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 47% stake in Anhui Guangxin Agrochemical. 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

Our data indicates that Private Companies hold 39%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 3 warning signs for Anhui Guangxin Agrochemical (1 doesn't sit too well with us!) that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.