Private companies among GuangDong Leary New Material Technology Co.,Ltd.'s (SHSE:688683) largest stockholders and were hit after last week's 10% price drop

Key Insights

• GuangDong Leary New Material TechnologyLtd's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 52% of the company is held by a single shareholder (Guangdong Tenai'er Investment Co., Ltd.)
• 13% of GuangDong Leary New Material TechnologyLtd is held by insiders

A look at the shareholders of GuangDong Leary New Material Technology Co.,Ltd. (SHSE:688683) can tell us which group is most powerful. The group holding the most number of shares in the company, around 54% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 10% decline in share price, private companies suffered the most losses.

In the chart below, we zoom in on the different ownership groups of GuangDong Leary New Material TechnologyLtd.

See our latest analysis for GuangDong Leary New Material TechnologyLtd

What Does The Institutional Ownership Tell Us About GuangDong Leary New Material TechnologyLtd?

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.

As you can see, institutional investors have a fair amount of stake in GuangDong Leary New Material TechnologyLtd. 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 GuangDong Leary New Material TechnologyLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in GuangDong Leary New Material TechnologyLtd. Our data shows that Guangdong Tenai'er Investment Co., Ltd. is the largest shareholder with 52% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. For context, the second largest shareholder holds about 8.7% of the shares outstanding, followed by an ownership of 2.4% by the third-largest shareholder.

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

Insider Ownership Of GuangDong Leary New Material TechnologyLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders maintain a significant holding in GuangDong Leary New Material Technology Co.,Ltd.. Insiders have a CN¥311m stake in this CN¥2.4b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over GuangDong Leary New Material TechnologyLtd. 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

It seems that Private Companies own 54%, of the GuangDong Leary New Material TechnologyLtd stock. 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 Leary New Material TechnologyLtd better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for GuangDong Leary New Material TechnologyLtd you should be aware of, and 2 of them are significant.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.