Shandong Fengyuan Chemical Co., Ltd.'s (SZSE:002805) 25% gain last week benefited both retail investors who own 56% as well as insiders

Key Insights

• The considerable ownership by retail investors in Shandong Fengyuan Chemical indicates that they collectively have a greater say in management and business strategy
• 44% of the business is held by the top 25 shareholders
• Insider ownership in Shandong Fengyuan Chemical is 31%

A look at the shareholders of Shandong Fengyuan Chemical Co., Ltd. (SZSE:002805) can tell us which group is most powerful. With 56% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 25% increase in the stock price last week, retail investors profited the most, but insiders who own 31% stock also stood to gain from the increase.

Let's delve deeper into each type of owner of Shandong Fengyuan Chemical, beginning with the chart below.

View our latest analysis for Shandong Fengyuan Chemical

What Does The Institutional Ownership Tell Us About Shandong Fengyuan Chemical?

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.

Shandong Fengyuan Chemical 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 Fengyuan Chemical's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Shandong Fengyuan Chemical. Our data shows that Zhao Guanghui is the largest shareholder with 30% of shares outstanding. Jintong Anyi Investment Management Co., Ltd. is the second largest shareholder owning 5.4% of common stock, and UBS Asset Management AG holds about 1.2% of the company stock.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant 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 Shandong Fengyuan Chemical

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 Shandong Fengyuan Chemical Co., Ltd.. Insiders have a CN¥1.1b stake in this CN¥3.5b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 56% of Shandong Fengyuan Chemical. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Equity Ownership

With an ownership of 5.4%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 3 warning signs for Shandong Fengyuan Chemical that you should be aware of before investing here.

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.