Institutions along with private companies who hold considerable shares inCNGR Advanced Material Co.,Ltd. (SZSE:300919) come under pressure; lose 4.0% of holdings value

Key Insights

• The considerable ownership by private companies in CNGR Advanced MaterialLtd indicates that they collectively have a greater say in management and business strategy
• 52% of the company is held by a single shareholder (Hunan Zhongwei Holding Group Co.,Ltd.)
• 19% of CNGR Advanced MaterialLtd is held by Institutions

A look at the shareholders of CNGR Advanced Material Co.,Ltd. (SZSE:300919) can tell us which group is most powerful. The group holding the most number of shares in the company, around 58% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 19% shares weren’t spared from last week’s CN¥1.3b market cap drop, private companies as a group suffered the maximum losses

Let's delve deeper into each type of owner of CNGR Advanced MaterialLtd, beginning with the chart below.

View our latest analysis for CNGR Advanced MaterialLtd

What Does The Institutional Ownership Tell Us About CNGR Advanced MaterialLtd?

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.

As you can see, institutional investors have a fair amount of stake in CNGR Advanced MaterialLtd. 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 CNGR Advanced MaterialLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

CNGR Advanced MaterialLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Hunan Zhongwei Holding Group Co.,Ltd. with 52% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. In comparison, the second and third largest shareholders hold about 3.2% and 1.9% of the stock. Weiming Deng, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of CNGR Advanced MaterialLtd

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.

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.

We can report that insiders do own shares in CNGR Advanced Material Co.,Ltd.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around CN¥1.1b worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over CNGR Advanced MaterialLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 58%, of the shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that CNGR Advanced MaterialLtd is showing 2 warning signs in our investment analysis , you should know about...

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com