Liaoning Kelong Fine Chemical,Inc. (SZSE:300405) surges 16%; individual investors who own 57% shares profited along with insiders

Key Insights

• Significant control over Liaoning Kelong Fine ChemicalInc by individual investors implies that the general public has more power to influence management and governance-related decisions
• 43% of the business is held by the top 25 shareholders
• Insiders own 31% of Liaoning Kelong Fine ChemicalInc

Every investor in Liaoning Kelong Fine Chemical,Inc. (SZSE:300405) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 57% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While individual investors were the group that reaped the most benefits after last week’s 16% price gain, insiders also received a 31% cut.

In the chart below, we zoom in on the different ownership groups of Liaoning Kelong Fine ChemicalInc.

Check out our latest analysis for Liaoning Kelong Fine ChemicalInc

What Does The Institutional Ownership Tell Us About Liaoning Kelong Fine ChemicalInc?

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 Liaoning Kelong Fine ChemicalInc does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Liaoning Kelong Fine ChemicalInc, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Liaoning Kelong Fine ChemicalInc. With a 30% stake, CEO Yan Jiang is the largest shareholder. Liaoyang State-Owned Assets Management (Group) Co., Ltd. is the second largest shareholder owning 5.1% of common stock, and Beijing Nuanyixin Private Fund Management Co., Ltd. holds about 1.8% of the company stock.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 Liaoning Kelong Fine ChemicalInc

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. 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.

It seems insiders own a significant proportion of Liaoning Kelong Fine Chemical,Inc.. Insiders have a CN¥442m stake in this CN¥1.4b business. 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 57% of Liaoning Kelong Fine ChemicalInc. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

We can see that Private Companies own 6.4%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Liaoning Kelong Fine ChemicalInc better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Liaoning Kelong Fine ChemicalInc you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.