JiaoZuo WanFang Aluminum Manufacturing Co., Ltd's (SZSE:000612) last week's 5.5% decline must have disappointed retail investors who have a significant stake

Key Insights

• JiaoZuo WanFang Aluminum Manufacturing's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 25 shareholders own 46% of the company
• Institutions own 10% of JiaoZuo WanFang Aluminum Manufacturing

A look at the shareholders of JiaoZuo WanFang Aluminum Manufacturing Co., Ltd (SZSE:000612) 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 retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 5.5% decline in share price, retail investors suffered the most losses.

In the chart below, we zoom in on the different ownership groups of JiaoZuo WanFang Aluminum Manufacturing.

Check out our latest analysis for JiaoZuo WanFang Aluminum Manufacturing

What Does The Institutional Ownership Tell Us About JiaoZuo WanFang Aluminum Manufacturing?

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 JiaoZuo WanFang Aluminum Manufacturing 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see JiaoZuo WanFang Aluminum Manufacturing's historic earnings and revenue below, but keep in mind there's always more to the story.

JiaoZuo WanFang Aluminum Manufacturing is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Kaiman Aluminum (Sanmenxia) Co., Ltd. with 12% of shares outstanding. Zhangshu Hetai Ancheng Investment Center (Limited Partnership) is the second largest shareholder owning 8.3% of common stock, and Hangzhou Jinjiang Group holds about 7.4% of the company stock.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of JiaoZuo WanFang Aluminum Manufacturing

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our data suggests that insiders own under 1% of JiaoZuo WanFang Aluminum Manufacturing Co., Ltd in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own CN¥7.2m worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public -- including retail investors -- own 54% of JiaoZuo WanFang Aluminum Manufacturing. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

Our data indicates that Private Companies hold 36%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand JiaoZuo WanFang Aluminum Manufacturing better, we need to consider many other factors. Be aware that JiaoZuo WanFang Aluminum Manufacturing is showing 1 warning sign in our investment analysis , you should know about...

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.

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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.