Individual investors in Sinofibers Technology Co.,Ltd. (SZSE:300777) are its biggest bettors, and their bets paid off as stock gained 4.1% last week

Key Insights

• Significant control over Sinofibers TechnologyLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 25 investors have a majority stake in the company with 41% ownership
• Insider ownership in Sinofibers TechnologyLtd is 13%

Every investor in Sinofibers Technology Co.,Ltd. (SZSE:300777) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 59% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, individual investors collectively scored the highest last week as the company hit CN¥12b market cap following a 4.1% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Sinofibers TechnologyLtd.

View our latest analysis for Sinofibers TechnologyLtd

What Does The Institutional Ownership Tell Us About Sinofibers TechnologyLtd?

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 Sinofibers TechnologyLtd does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Sinofibers TechnologyLtd, (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 Sinofibers TechnologyLtd. Changzhou Huatai Investment Management Co., Ltd. is currently the company's largest shareholder with 14% of shares outstanding. For context, the second largest shareholder holds about 4.7% of the shares outstanding, followed by an ownership of 3.4% by the third-largest shareholder. In addition, we found that Yuefang Wen, the CEO has 2.1% of the shares allocated to their name.

Our studies suggest that the top 25 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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Sinofibers TechnologyLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 Sinofibers Technology Co.,Ltd.. It is very interesting to see that insiders have a meaningful CN¥1.5b stake in this CN¥12b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 59% of Sinofibers TechnologyLtd shares. 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

Our data indicates that Private Companies hold 19%, of the company's shares. 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 Sinofibers TechnologyLtd better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Sinofibers TechnologyLtd you should be aware of.

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.