CEO Zhaozhong Wang, Highbroad Advanced Material (Hefei) Co., Ltd.'s (SZSE:301321) largest shareholder sees value of holdings go down 12% after recent drop

Key Insights

• Highbroad Advanced Material (Hefei)'s significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 52% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Highbroad Advanced Material (Hefei) Co., Ltd. (SZSE:301321), then you'll have to look at the makeup of its share registry. With 41% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to CN¥2.4b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Highbroad Advanced Material (Hefei), beginning with the chart below.

See our latest analysis for Highbroad Advanced Material (Hefei)

What Does The Institutional Ownership Tell Us About Highbroad Advanced Material (Hefei)?

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.

Highbroad Advanced Material (Hefei) already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Highbroad Advanced Material (Hefei)'s earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Highbroad Advanced Material (Hefei). With a 41% stake, CEO Zhaozhong Wang is the largest shareholder. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 3.8% by the third-largest shareholder.

To make our study more interesting, we found that the top 2 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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Highbroad Advanced Material (Hefei)

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.

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 most recent data indicates that insiders own a reasonable proportion of Highbroad Advanced Material (Hefei) Co., Ltd.. Insiders own CN¥986m worth of shares in the CN¥2.4b company. 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 37% stake in Highbroad Advanced Material (Hefei). 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

It seems that Private Companies own 12%, of the Highbroad Advanced Material (Hefei) stock. 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:

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. For example, we've discovered 3 warning signs for Highbroad Advanced Material (Hefei) that you should be aware of before investing here.

Of course this may not be the best stock to buy. So take a peek at this free 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.