Insiders are the top stockholders in Poly Plastic Masterbatch (SuZhou) Co.,Ltd (SZSE:300905), and the recent 6.9% drop might have disappointed them

Key Insights

• Significant insider control over Poly Plastic Masterbatch (SuZhou)Ltd implies vested interests in company growth
• 52% of the business is held by the top 5 shareholders
• Institutions own 13% of Poly Plastic Masterbatch (SuZhou)Ltd

Every investor in Poly Plastic Masterbatch (SuZhou) Co.,Ltd (SZSE:300905) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 32% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders as a group endured the highest losses after market cap fell by CN¥386m.

Let's take a closer look to see what the different types of shareholders can tell us about Poly Plastic Masterbatch (SuZhou)Ltd.

View our latest analysis for Poly Plastic Masterbatch (SuZhou)Ltd

What Does The Institutional Ownership Tell Us About Poly Plastic Masterbatch (SuZhou)Ltd?

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.

Poly Plastic Masterbatch (SuZhou)Ltd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Poly Plastic Masterbatch (SuZhou)Ltd's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Poly Plastic Masterbatch (SuZhou)Ltd. Our data shows that Suzhou Juxingbao Electronic Technology Co., Ltd. is the largest shareholder with 18% of shares outstanding. With 16% and 6.2% of the shares outstanding respectively, Wenda Xu and Yiming Xu are the second and third largest shareholders. Yiming Xu, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. Additionally, the company's CEO Fuming Gong directly holds 1.6% of the total shares outstanding.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Poly Plastic Masterbatch (SuZhou)Ltd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our information suggests that insiders maintain a significant holding in Poly Plastic Masterbatch (SuZhou) Co.,Ltd. Insiders own CN¥1.7b worth of shares in the CN¥5.2b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in Poly Plastic Masterbatch (SuZhou)Ltd. 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

It seems that Private Companies own 24%, of the Poly Plastic Masterbatch (SuZhou)Ltd stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Poly Plastic Masterbatch (SuZhou)Ltd better, we need to consider many other factors. Be aware that Poly Plastic Masterbatch (SuZhou)Ltd is showing 3 warning signs in our investment analysis , and 2 of those are a bit unpleasant...

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.