Following recent decline, Shanghai Pret Composites Co., Ltd.'s (SZSE:002324) top shareholder CEO Wen Zhou sees holdings value drop by 4.9%

Key Insights

• Shanghai Pret Composites' significant insider ownership suggests inherent interests in company's expansion
• The top 4 shareholders own 51% of the company
• Institutional ownership in Shanghai Pret Composites is 11%

To get a sense of who is truly in control of Shanghai Pret Composites Co., Ltd. (SZSE:002324), it is important to understand the ownership structure of the business. With 45% stake, individual insiders 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.

And last week, insiders endured the biggest losses as the stock fell by 4.9%.

Let's delve deeper into each type of owner of Shanghai Pret Composites, beginning with the chart below.

See our latest analysis for Shanghai Pret Composites

What Does The Institutional Ownership Tell Us About Shanghai Pret Composites?

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 Shanghai Pret Composites. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Shanghai Pret Composites' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Shanghai Pret Composites. Looking at our data, we can see that the largest shareholder is the CEO Wen Zhou with 41% of shares outstanding. GF Fund Management Co., Ltd. is the second largest shareholder owning 4.8% of common stock, and Yiqun Guo holds about 4.0% of the company stock.

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.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Shanghai Pret Composites

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.

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 most recent data indicates that insiders own a reasonable proportion of Shanghai Pret Composites Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥5.0b stake in this CN¥11b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 43% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shanghai Pret Composites. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shanghai Pret Composites better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Shanghai Pret Composites (including 1 which is potentially serious) .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.