Retail investors invested in Jiangsu Dingsheng New Materials Joint-Stock Co.,Ltd (SHSE:603876) copped the brunt of last week's CN¥427m market cap decline

Key Insights

• Jiangsu Dingsheng New Materials Ltd's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 3 shareholders own 50% of the company
• Insider ownership in Jiangsu Dingsheng New Materials Ltd is 11%

If you want to know who really controls Jiangsu Dingsheng New Materials Joint-Stock Co.,Ltd (SHSE:603876), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 30% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 4.4% decline in share price, retail investors suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Jiangsu Dingsheng New Materials Ltd.

View our latest analysis for Jiangsu Dingsheng New Materials Ltd

What Does The Institutional Ownership Tell Us About Jiangsu Dingsheng New Materials Ltd?

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.

We can see that Jiangsu Dingsheng New Materials Ltd does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Jiangsu Dingsheng New Materials Ltd, (below). Of course, keep in mind that there are other factors to consider, too.

Jiangsu Dingsheng New Materials Ltd is not owned by hedge funds. Hangzhou Dingsheng Industrial Group Co.,Ltd. is currently the largest shareholder, with 28% of shares outstanding. The second and third largest shareholders are Gongqingcheng Purun Investment Management Partnership Enterprise (Limited Partnership) and Xianhai Zhou, with an equal amount of shares to their name at 11%.

To make our study more interesting, we found that the top 3 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Jiangsu Dingsheng New Materials Ltd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 information suggests that insiders maintain a significant holding in Jiangsu Dingsheng New Materials Joint-Stock Co.,Ltd. It has a market capitalization of just CN¥9.3b, and insiders have CN¥1.1b worth of shares in their own names. That's quite significant. 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

The general public-- including retail investors -- own 30% 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

Private equity firms hold a 11% stake in Jiangsu Dingsheng New Materials Ltd. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

It seems that Private Companies own 29%, of the Jiangsu Dingsheng New Materials Ltd 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:

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 Jiangsu Dingsheng New Materials Ltd is showing 2 warning signs in our investment analysis , you should know about...

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.