Retail investors who hold 42% of Shandong Sinocera Functional Material Co., Ltd. (SZSE:300285) gained 8.1%, institutions profited as well

Key Insights

• Significant control over Shandong Sinocera Functional Material by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 17 investors have a majority stake in the company with 51% ownership
• 26% of Shandong Sinocera Functional Material is held by insiders

To get a sense of who is truly in control of Shandong Sinocera Functional Material Co., Ltd. (SZSE:300285), it is important to understand the ownership structure of the business. With 42% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 8.1% increase in the stock price last week, retail investors profited the most, but institutions who own 28% stock also stood to gain from the increase.

Let's take a closer look to see what the different types of shareholders can tell us about Shandong Sinocera Functional Material.

View our latest analysis for Shandong Sinocera Functional Material

What Does The Institutional Ownership Tell Us About Shandong Sinocera Functional Material?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Shandong Sinocera Functional Material. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Shandong Sinocera Functional Material's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Shandong Sinocera Functional Material. Zhang Xi is currently the company's largest shareholder with 15% of shares outstanding. With 5.0% and 4.1% of the shares outstanding respectively, Hong Wang and Dongying Austrian far Industry & Trade Co., Ltd. are the second and third largest shareholders.

After doing some more digging, we found that the top 17 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Shandong Sinocera Functional Material

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.

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 most recent data indicates that insiders own a reasonable proportion of Shandong Sinocera Functional Material Co., Ltd.. Insiders own CN¥5.1b worth of shares in the CN¥20b company. That's quite meaningful. 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 42% stake in Shandong Sinocera Functional Material. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 4.1%, of the Shandong Sinocera Functional Material stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Shandong Sinocera Functional Material better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.