Shandong Sinocera Functional Material Co., Ltd.'s (SZSE:300285) 6.8% loss last week hit both individual investors who own 42% as well as institutions

Key Insights

• Significant control over Shandong Sinocera Functional Material by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 15 investors have a majority stake in the company with 50% ownership
• Insider ownership in Shandong Sinocera Functional Material is 26%

A look at the shareholders of Shandong Sinocera Functional Material Co., Ltd. (SZSE:300285) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 42% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 28% shares weren’t spared from last week’s CN¥1.3b market cap drop, individual investors as a group suffered the maximum losses

Let's delve deeper into each type of owner of Shandong Sinocera Functional Material, beginning with the chart below.

Check out our latest analysis for Shandong Sinocera Functional Material

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

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 Sinocera Functional Material already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Sinocera Functional Material's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Shandong Sinocera Functional Material. The company's largest shareholder is Zhang Xi, with ownership of 20%. Dongying Austrian far Industry & Trade Co., Ltd. is the second largest shareholder owning 4.1% of common stock, and Schroder Investment Management (Hong Kong) Ltd. holds about 4.0% of the company stock.

After doing some more digging, we found that the top 15 have the combined ownership of 50% 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Shandong Sinocera Functional Material

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own a reasonable proportion of Shandong Sinocera Functional Material Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥4.7b stake in this CN¥18b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 42% stake in Shandong Sinocera Functional Material. 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.

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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Shandong Sinocera Functional Material is showing 1 warning sign in our investment analysis , 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.