Asymchem Laboratories (Tianjin) Co., Ltd.'s (SZSE:002821) market cap dropped CN¥2.3b last week; Private companies bore the brunt

Key Insights

• The considerable ownership by private companies in Asymchem Laboratories (Tianjin) indicates that they collectively have a greater say in management and business strategy
• The top 7 shareholders own 50% of the company
• Institutional ownership in Asymchem Laboratories (Tianjin) is 28%

Every investor in Asymchem Laboratories (Tianjin) Co., Ltd. (SZSE:002821) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 35% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 9.7% decline in share price, private companies suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Asymchem Laboratories (Tianjin).

See our latest analysis for Asymchem Laboratories (Tianjin)

What Does The Institutional Ownership Tell Us About Asymchem Laboratories (Tianjin)?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Asymchem Laboratories (Tianjin). 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 Asymchem Laboratories (Tianjin), (below). Of course, keep in mind that there are other factors to consider, too.

Asymchem Laboratories (Tianjin) is not owned by hedge funds. Our data shows that Asymchem Laboratories, Inc. is the largest shareholder with 33% of shares outstanding. Zhong Ou Fund Management Co., Ltd is the second largest shareholder owning 5.9% of common stock, and Hao Hong holds about 4.1% of the company stock. Hao Hong, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Asymchem Laboratories (Tianjin)

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

Shareholders would probably be interested to learn that insiders own shares in Asymchem Laboratories (Tianjin) 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¥894m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

With a 32% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Asymchem Laboratories (Tianjin). 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

We can see that Private Companies own 35%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Asymchem Laboratories (Tianjin) better, we need to consider many other factors. Take risks for example - Asymchem Laboratories (Tianjin) has 1 warning sign we think you should be aware of.

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.

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

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.