Insiders the biggest winners as Kunshan Asia Aroma Corp., Ltd.'s (SZSE:301220) market cap rises to CN¥2.2b

Key Insights

• Kunshan Asia Aroma's significant insider ownership suggests inherent interests in company's expansion
• The top 3 shareholders own 52% of the company
• Institutions own 17% of Kunshan Asia Aroma

If you want to know who really controls Kunshan Asia Aroma Corp., Ltd. (SZSE:301220), 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 42% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥309m last week.

Let's delve deeper into each type of owner of Kunshan Asia Aroma, beginning with the chart below.

See our latest analysis for Kunshan Asia Aroma

What Does The Institutional Ownership Tell Us About Kunshan Asia Aroma?

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 Kunshan Asia Aroma 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 Kunshan Asia Aroma, (below). Of course, keep in mind that there are other factors to consider, too.

Kunshan Asia Aroma is not owned by hedge funds. The company's largest shareholder is Junxue Zhou, with ownership of 40%. With 6.9% and 4.3% of the shares outstanding respectively, Kunshan Dinglong Bohui Investment Management Enterprise (Limited Partnership) and Shanghai Yonghua Capital Management Co., Ltd. are the second and third largest shareholders. In addition, we found that Jiangang Tang, the CEO has 0.6% of the shares allocated to their name.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Kunshan Asia Aroma

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

It seems insiders own a significant proportion of Kunshan Asia Aroma Corp., Ltd.. It has a market capitalization of just CN¥2.2b, and insiders have CN¥933m worth of shares in their own names. 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 31% stake in Kunshan Asia Aroma. 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 9.1%, of the Kunshan Asia Aroma stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 3 warning signs for Kunshan Asia Aroma (1 is a bit unpleasant!) that you should be aware of before investing here.

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.