Jiangyin Haida Rubber And Plastic Co., Ltd.'s (SZSE:300320) last week's 9.9% decline must have disappointed retail investors who have a significant stake

Key Insights

• Significant control over Jiangyin Haida Rubber And Plastic by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 20 investors have a majority stake in the company with 48% ownership
• Insiders own 39% of Jiangyin Haida Rubber And Plastic

To get a sense of who is truly in control of Jiangyin Haida Rubber And Plastic Co., Ltd. (SZSE:300320), it is important to understand the ownership structure of the business. With 52% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of retail investors took a hit after last week’s 9.9% price drop, insiders with their 39% also suffered.

Let's take a closer look to see what the different types of shareholders can tell us about Jiangyin Haida Rubber And Plastic.

View our latest analysis for Jiangyin Haida Rubber And Plastic

What Does The Institutional Ownership Tell Us About Jiangyin Haida Rubber And Plastic?

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 Jiangyin Haida Rubber And Plastic. 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 Jiangyin Haida Rubber And Plastic's historic earnings and revenue below, but keep in mind there's always more to the story.

Jiangyin Haida Rubber And Plastic is not owned by hedge funds. With a 20% stake, CEO Zhenyu Qian is the largest shareholder. Yanyun Qian is the second largest shareholder owning 9.6% of common stock, and Minhua Sun holds about 4.4% of the company stock.

Our studies suggest that the top 20 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Jiangyin Haida Rubber And Plastic

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.

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 Jiangyin Haida Rubber And Plastic Co., Ltd.. Insiders own CN¥2.0b worth of shares in the CN¥5.2b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public -- including retail investors -- own 52% of Jiangyin Haida Rubber And Plastic. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Jiangyin Haida Rubber And Plastic , and understanding them should be part of your investment process.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.