Insiders the biggest winners as Milkyway Chemical Supply Chain Service Co.,Ltd's (SHSE:603713) market cap rises to CN¥8.8b

Key Insights

• Milkyway Chemical Supply Chain ServiceLtd's significant insider ownership suggests inherent interests in company's expansion
• The top 5 shareholders own 50% of the company
• Institutional ownership in Milkyway Chemical Supply Chain ServiceLtd is 22%

Every investor in Milkyway Chemical Supply Chain Service Co.,Ltd (SHSE:603713) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 40% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, insiders benefitted the most after the company's market cap rose by CN¥375m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Milkyway Chemical Supply Chain ServiceLtd.

View our latest analysis for Milkyway Chemical Supply Chain ServiceLtd

What Does The Institutional Ownership Tell Us About Milkyway Chemical Supply Chain ServiceLtd?

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.

Milkyway Chemical Supply Chain ServiceLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Milkyway Chemical Supply Chain ServiceLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Milkyway Chemical Supply Chain ServiceLtd. The company's largest shareholder is Yinhe Chen, with ownership of 39%. In comparison, the second and third largest shareholders hold about 3.7% and 2.5% of the stock.

On looking further, we found that 50% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Milkyway Chemical Supply Chain ServiceLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Milkyway Chemical Supply Chain Service Co.,Ltd. It has a market capitalization of just CN¥8.8b, and insiders have CN¥3.5b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 30% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Milkyway Chemical Supply Chain ServiceLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 8.5%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Milkyway Chemical Supply Chain ServiceLtd (1 is potentially serious!) that you should be aware of before investing here.

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.

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