Shandong Hontron Aluminum Industry Holding Company Limited's (SZSE:002379) market cap surged CN¥659m last week, retail investors who have a lot riding on the company were rewarded

Key Insights

• Significant control over Shandong Hontron Aluminum Industry Holding by retail investors implies that the general public has more power to influence management and governance-related decisions
• 45% of the business is held by the top 25 shareholders
• Institutional ownership in Shandong Hontron Aluminum Industry Holding is 17%

A look at the shareholders of Shandong Hontron Aluminum Industry Holding Company Limited (SZSE:002379) can tell us which group is most powerful. With 55% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, retail investors benefitted the most after the company's market cap rose by CN¥659m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Shandong Hontron Aluminum Industry Holding.

See our latest analysis for Shandong Hontron Aluminum Industry Holding

What Does The Institutional Ownership Tell Us About Shandong Hontron Aluminum Industry Holding?

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.

Shandong Hontron Aluminum Industry Holding already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Shandong Hontron Aluminum Industry Holding's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Shandong Hontron Aluminum Industry Holding. Shiping Prosperity Private Trust Company is currently the company's largest shareholder with 23% of shares outstanding. With 2.9% and 2.5% of the shares outstanding respectively, Shanghai Longlife Investment Co., Ltd. and Guangzhou Xinyihe Asset Management Co., Ltd. are the second and third largest shareholders.

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.

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

Insider Ownership Of Shandong Hontron Aluminum Industry Holding

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Shandong Hontron Aluminum Industry Holding Company Limited. This is a big company, so it is good to see this level of alignment. Insiders own CN¥181m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 55% of Shandong Hontron Aluminum Industry Holding shares. 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

It seems that Private Companies own 24%, of the Shandong Hontron Aluminum Industry Holding stock. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that Shandong Hontron Aluminum Industry Holding is showing 1 warning sign in our investment analysis , you should know about...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.