Kunshan Asia Aroma Corp., Ltd.'s (SZSE:301220) market cap increased by CN¥930m, insiders receive a 42% cut

Key Insights

• Insiders appear to have a vested interest in Kunshan Asia Aroma's growth, as seen by their sizeable ownership
• The top 3 shareholders own 50% of the company
• 15% of Kunshan Asia Aroma is held by Institutions

Every investor in Kunshan Asia Aroma Corp., Ltd. (SZSE:301220) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 42% ownership. 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 were the biggest beneficiaries of last week’s 32% gain.

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

Hedge funds don't have many shares in Kunshan Asia Aroma. Junxue Zhou is currently the largest shareholder, with 40% of shares outstanding. Kunshan Dinglong Bohui Investment Management Enterprise (Limited Partnership) is the second largest shareholder owning 6.9% of common stock, and Shanghai Yongping Private Fund Management Partnership Enterprise (Limited Partnership) holds about 3.1% of the company stock. In addition, we found that Jiangang Tang, the CEO has 0.6% of the shares allocated to their name.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 50% stake.

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 Kunshan Asia Aroma

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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.

Our information suggests that insiders maintain a significant holding in Kunshan Asia Aroma Corp., Ltd.. Insiders have a CN¥1.6b stake in this CN¥3.8b business. 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

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over 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 8.9%, 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:

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 Kunshan Asia Aroma (including 1 which is a bit concerning) .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.