Private companies among Guangdong Haomei New Materials Co.,Ltd's (SZSE:002988) largest shareholders, saw gain in holdings value after stock jumped 8.2% last week

Key Insights

• The considerable ownership by private companies in Guangdong Haomei New MaterialsLtd indicates that they collectively have a greater say in management and business strategy
• The top 2 shareholders own 58% of the company
• Insiders own 24% of Guangdong Haomei New MaterialsLtd

To get a sense of who is truly in control of Guangdong Haomei New Materials Co.,Ltd (SZSE:002988), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies with 35% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies collectively scored the highest last week as the company hit CN¥6.1b market cap following a 8.2% gain in the stock.

Let's delve deeper into each type of owner of Guangdong Haomei New MaterialsLtd, beginning with the chart below.

View our latest analysis for Guangdong Haomei New MaterialsLtd

What Does The Institutional Ownership Tell Us About Guangdong Haomei New 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.

We can see that Guangdong Haomei New MaterialsLtd does have institutional investors; and they hold a good portion of the company's stock. 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 Guangdong Haomei New MaterialsLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Guangdong Haomei New MaterialsLtd is not owned by hedge funds. Our data shows that Guangdong Haomei Investment Group Co., Ltd. is the largest shareholder with 35% of shares outstanding. Xueqin Li is the second largest shareholder owning 23% of common stock, and Shanghai Chiyao Investment Co., Ltd holds about 5.4% of the company stock.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 58% stake.

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 Guangdong Haomei New MaterialsLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders maintain a significant holding in Guangdong Haomei New Materials Co.,Ltd. Insiders own CN¥1.4b worth of shares in the CN¥6.1b company. 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

With a 28% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Guangdong Haomei New MaterialsLtd. 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. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Guangdong Haomei New MaterialsLtd (of which 1 is a bit unpleasant!) you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.