With a 42% stake, Yongxing Special Materials Technology Co.,Ltd (SZSE:002756) insiders have a lot riding on the company

Key Insights

• Insiders appear to have a vested interest in Yongxing Special Materials TechnologyLtd's growth, as seen by their sizeable ownership
• A total of 5 investors have a majority stake in the company with 51% ownership
• Institutional ownership in Yongxing Special Materials TechnologyLtd is 17%

Every investor in Yongxing Special Materials Technology Co.,Ltd (SZSE:002756) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 42% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

So it follows, every decision made by insiders of Yongxing Special Materials TechnologyLtd regarding the company's future would be crucial to them.

Let's delve deeper into each type of owner of Yongxing Special Materials TechnologyLtd, beginning with the chart below.

View our latest analysis for Yongxing Special Materials TechnologyLtd

What Does The Institutional Ownership Tell Us About Yongxing Special Materials TechnologyLtd?

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.

Yongxing Special Materials TechnologyLtd 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. 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 Yongxing Special Materials TechnologyLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Yongxing Special Materials TechnologyLtd. With a 36% stake, CEO Xingjiang Gao is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 7.3% and 2.9%, of the shares outstanding, respectively.

On looking further, we found that 51% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Yongxing Special Materials TechnologyLtd

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.

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.

It seems insiders own a significant proportion of Yongxing Special Materials Technology Co.,Ltd. It has a market capitalization of just CN¥23b, and insiders have CN¥9.5b worth of shares in their own names. That's quite significant. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 34% stake in Yongxing Special Materials TechnologyLtd. 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.

Public Company Ownership

It appears to us that public companies own 7.3% of Yongxing Special Materials TechnologyLtd. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Yongxing Special Materials TechnologyLtd has 4 warning signs (and 2 which shouldn't be ignored) we think you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.