Zhejiang Zhongxin Fluoride Materials Co.,Ltd's (SZSE:002915) market cap surged CN¥371m last week, retail investors who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by retail investors in Zhejiang Zhongxin Fluoride MaterialsLtd indicates that they collectively have a greater say in management and business strategy
• The top 7 shareholders own 51% of the company
• 21% of Zhejiang Zhongxin Fluoride MaterialsLtd is held by insiders

Every investor in Zhejiang Zhongxin Fluoride Materials Co.,Ltd (SZSE:002915) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 42% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, retail investors collectively scored the highest last week as the company hit CN¥3.3b market cap following a 13% gain in the stock.

Let's delve deeper into each type of owner of Zhejiang Zhongxin Fluoride MaterialsLtd, beginning with the chart below.

View our latest analysis for Zhejiang Zhongxin Fluoride MaterialsLtd

What Does The Institutional Ownership Tell Us About Zhejiang Zhongxin Fluoride MaterialsLtd?

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.

Less than 5% of Zhejiang Zhongxin Fluoride MaterialsLtd is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Zhejiang Zhongxin Fluoride MaterialsLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Zhejiang Baiyun Weiye Holding Group Co., Ltd. with 20% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.0% and 6.0%, of the shares outstanding, respectively. Yin Gao Chen, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Additionally, the company's CEO Chao Wang directly holds 4.0% of the total shares outstanding.

We did some more digging and found that 7 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 Zhejiang Zhongxin Fluoride MaterialsLtd

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.

Our most recent data indicates that insiders own a reasonable proportion of Zhejiang Zhongxin Fluoride Materials Co.,Ltd. Insiders have a CN¥687m stake in this CN¥3.3b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 42% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 35%, of the company's shares. 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. For example, we've discovered 2 warning signs for Zhejiang Zhongxin Fluoride MaterialsLtd (1 is significant!) that you should be aware of before investing here.

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.