Asymchem Laboratories (Tianjin) Co., Ltd.'s (SZSE:002821) market cap dropped CN¥1.2b last week; Retail investors bore the brunt

Key Insights

• The considerable ownership by retail investors in Asymchem Laboratories (Tianjin) indicates that they collectively have a greater say in management and business strategy
• A total of 7 investors have a majority stake in the company with 50% ownership
• Insiders have bought recently

To get a sense of who is truly in control of Asymchem Laboratories (Tianjin) Co., Ltd. (SZSE:002821), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 37% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, retail investors as a group endured the highest losses last week after market cap fell by CN¥1.2b.

Let's delve deeper into each type of owner of Asymchem Laboratories (Tianjin), beginning with the chart below.

See our latest analysis for Asymchem Laboratories (Tianjin)

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

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 Asymchem Laboratories (Tianjin) 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Asymchem Laboratories (Tianjin)'s earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Asymchem Laboratories (Tianjin). Asymchem Laboratories, Inc. is currently the largest shareholder, with 32% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 6.1% and 4.0%, of the shares outstanding, respectively. Hao Hong, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

We did some more digging and found that 7 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Asymchem Laboratories (Tianjin) Co., Ltd.. This is a big company, so it is good to see this level of alignment. Insiders own CN¥1.0b 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 37% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Asymchem Laboratories (Tianjin). This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 34%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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 2 warning signs we think you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.