China XLX Fertiliser Ltd.'s (HKG:1866) stock price dropped 5.3% last week; retail investors would not be happy

Key Insights

• China XLX Fertiliser's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 3 investors have a majority stake in the company with 52% ownership
• Recent purchases by insiders

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To get a sense of who is truly in control of China XLX Fertiliser Ltd. (HKG:1866), 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 45% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 5.3% decline in share price, retail investors suffered the most losses.

In the chart below, we zoom in on the different ownership groups of China XLX Fertiliser.

View our latest analysis for China XLX Fertiliser

What Does The Institutional Ownership Tell Us About China XLX Fertiliser?

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.

Institutions have a very small stake in China XLX Fertiliser. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

China XLX Fertiliser is not owned by hedge funds. Pioneer Top Holdings Limited is currently the company's largest shareholder with 30% of shares outstanding. Yunhua Yan is the second largest shareholder owning 18% of common stock, and Teeroy Limited holds about 4.9% of the company stock. Yunhua Yan, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence 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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of China XLX Fertiliser

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

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 most recent data indicates that insiders own a reasonable proportion of China XLX Fertiliser Ltd.. Insiders own HK$1.4b worth of shares in the HK$7.9b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public-- including retail investors -- own 45% stake in the company, and hence can't easily be ignored. 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

It seems that Private Companies own 35%, of the China XLX Fertiliser 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. Take risks for example - China XLX Fertiliser has 3 warning signs we think you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.