Chengdu Shengbang Seals Co.,Ltd.'s (SZSE:301233) market cap increased by CN¥321m, insiders receive a 62% cut

Key Insights

• Insiders appear to have a vested interest in Chengdu Shengbang SealsLtd's growth, as seen by their sizeable ownership
• The top 2 shareholders own 59% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Chengdu Shengbang Seals Co.,Ltd. (SZSE:301233) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 62% 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 15% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Chengdu Shengbang SealsLtd.

See our latest analysis for Chengdu Shengbang SealsLtd

What Does The Institutional Ownership Tell Us About Chengdu Shengbang SealsLtd?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Since institutions own only a small portion of Chengdu Shengbang SealsLtd, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in Chengdu Shengbang SealsLtd. The company's largest shareholder is Xilong Lai, with ownership of 43%. Meanwhile, the second and third largest shareholders, hold 17% and 0.9%, of the shares outstanding, respectively. Note that the second and third-largest shareholders are also Chief Executive Officer and Member of the Board of Directors, respectively, meaning that the company's top shareholders are insiders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 59% stake.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Chengdu Shengbang SealsLtd

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. 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.

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 own more than half of Chengdu Shengbang Seals Co.,Ltd.. This gives them effective control of the company. So they have a CN¥1.5b stake in this CN¥2.5b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Chengdu Shengbang SealsLtd. 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.

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 2 warning signs we've spotted with Chengdu Shengbang SealsLtd (including 1 which doesn't sit too well with us) .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.