Following recent decline, Guangdong Skychem Technology Co., Ltd.'s (SHSE:688603) top shareholder Senior Key Executive Jiangbo Liu sees holdings value drop by 7.7%

Key Insights

• Insiders appear to have a vested interest in Guangdong Skychem Technology's growth, as seen by their sizeable ownership
• A total of 4 investors have a majority stake in the company with 60% ownership
• Institutional ownership in Guangdong Skychem Technology is 19%

Every investor in Guangdong Skychem Technology Co., Ltd. (SHSE:688603) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 32% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As market cap fell to CN¥6.7b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Guangdong Skychem Technology.

View our latest analysis for Guangdong Skychem Technology

What Does The Institutional Ownership Tell Us About Guangdong Skychem Technology?

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.

Guangdong Skychem Technology 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. 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 Guangdong Skychem Technology's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Guangdong Skychem Technology. From our data, we infer that the largest shareholder is Jiangbo Liu (who also holds the title of Senior Key Executive) with 17% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. With 16% and 15% of the shares outstanding respectively, Shanghai Daotian Electronic Technology Co., Ltd. and Maojun Tong are the second and third largest shareholders. Interestingly, the third-largest shareholder, Maojun Tong is also a Chairman of the Board, again, indicating strong insider ownership amongst the company's top shareholders.

On looking further, we found that 60% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Guangdong Skychem Technology

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.

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.

It seems insiders own a significant proportion of Guangdong Skychem Technology Co., Ltd.. It has a market capitalization of just CN¥6.7b, and insiders have CN¥2.2b worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Guangdong Skychem Technology. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 31%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Guangdong Skychem Technology better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Guangdong Skychem Technology .

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.