Shandong Sinocera Functional Material Co., Ltd.'s (SZSE:300285) market cap dropped CN¥1.2b last week; individual investors who hold 39% were hit as were institutions

Key Insights

• Shandong Sinocera Functional Material's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 51% of the business is held by the top 15 shareholders
• Insider ownership in Shandong Sinocera Functional Material is 26%

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. The group holding the most number of shares in the company, around 39% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While institutions, who own 31% shares weren’t spared from last week’s CN¥1.2b market cap drop, individual investors as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of Shandong Sinocera Functional Material.

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 suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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.

Shandong Sinocera Functional Material is not owned by hedge funds. Our data shows that Zhang Xi is the largest shareholder with 20% of shares outstanding. With 4.1% and 4.0% of the shares outstanding respectively, Dongying Austrian far Industry & Trade Co., Ltd. and Schroder Investment Management (Hong Kong) Ltd. are the second and third largest shareholders.

After doing some more digging, we found that the top 15 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Shandong Sinocera Functional Material

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.

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 information suggests that insiders maintain a significant holding in Shandong Sinocera Functional Material Co., Ltd.. It has a market capitalization of just CN¥16b, and insiders have CN¥4.0b worth of shares in their own names. That's quite significant. 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 39% 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's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.