Private companies in Polyrocks Chemical Co.,LTD (SHSE:688669) are its biggest bettors, and their bets paid off as stock gained 12% last week

Key Insights

• Significant control over Polyrocks ChemicalLTD by private companies implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 4 shareholders
• Insiders own 10% of Polyrocks ChemicalLTD

A look at the shareholders of Polyrocks Chemical Co.,LTD (SHSE:688669) can tell us which group is most powerful. With 39% stake, private companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies collectively scored the highest last week as the company hit CN¥1.3b market cap following a 12% gain in the stock.

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

See our latest analysis for Polyrocks ChemicalLTD

What Does The Institutional Ownership Tell Us About Polyrocks ChemicalLTD?

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.

Polyrocks ChemicalLTD 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 Polyrocks ChemicalLTD's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Polyrocks ChemicalLTD. Our data shows that Guangzhou Shipanshi Investment Management Co., Ltd. is the largest shareholder with 39% of shares outstanding. Gang Chen is the second largest shareholder owning 5.0% of common stock, and Zhenggao Yang holds about 3.5% of the company stock. Two of the top three shareholders happen to be Chief Executive Officer and Member of the Board of Directors, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Polyrocks ChemicalLTD

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 Polyrocks Chemical Co.,LTD. Insiders own CN¥136m worth of shares in the CN¥1.3b company. 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 37% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Polyrocks ChemicalLTD. 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

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:

It's always worth thinking about the different groups who own shares in a company. But to understand Polyrocks ChemicalLTD better, we need to consider many other factors. For instance, we've identified 3 warning signs for Polyrocks ChemicalLTD that you should be aware of.

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.