Fujian Acetron New Materials Co., Ltd.'s (SZSE:300706) stock price dropped 10% last week; retail investors would not be happy

Key Insights

• Fujian Acetron New Materials' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 7 investors have a majority stake in the company with 50% ownership
• Insiders own 42% of Fujian Acetron New Materials

If you want to know who really controls Fujian Acetron New Materials Co., Ltd. (SZSE:300706), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 47% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders who own 42% came under pressure after market cap dropped to CN¥2.9b last week,retail investors took the most losses.

In the chart below, we zoom in on the different ownership groups of Fujian Acetron New Materials.

See our latest analysis for Fujian Acetron New Materials

What Does The Institutional Ownership Tell Us About Fujian Acetron New Materials?

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.

As you can see, institutional investors have a fair amount of stake in Fujian Acetron New Materials. 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 Fujian Acetron New Materials, (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 Fujian Acetron New Materials. With a 32% stake, CEO Qinzhong Chen is the largest shareholder. For context, the second largest shareholder holds about 7.5% of the shares outstanding, followed by an ownership of 5.4% by the third-largest shareholder.

We did some more digging and found that 7 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Fujian Acetron New Materials

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems insiders own a significant proportion of Fujian Acetron New Materials Co., Ltd.. Insiders own CN¥1.2b worth of shares in the CN¥2.9b 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, who are usually individual investors, hold a 47% stake in Fujian Acetron New Materials. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 5.4%, 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:

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. To that end, you should learn about the 3 warning signs we've spotted with Fujian Acetron New Materials (including 1 which shouldn't be ignored) .

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.