Public companies are Lotte Chemical Titan Holding Berhad's (KLSE:LCTITAN) biggest owners and were hit after market cap dropped RM228m

Key Insights

• The considerable ownership by public companies in Lotte Chemical Titan Holding Berhad indicates that they collectively have a greater say in management and business strategy
• Lotte Chemical Corporation owns 76% of the company
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of Lotte Chemical Titan Holding Berhad (KLSE:LCTITAN) can tell us which group is most powerful. The group holding the most number of shares in the company, around 76% to be precise, is public companies. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 7.5% decline in share price, public companies suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Lotte Chemical Titan Holding Berhad.

See our latest analysis for Lotte Chemical Titan Holding Berhad

What Does The Institutional Ownership Tell Us About Lotte Chemical Titan Holding Berhad?

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.

Lotte Chemical Titan Holding Berhad 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. 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 Lotte Chemical Titan Holding Berhad, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Lotte Chemical Titan Holding Berhad. Lotte Chemical Corporation is currently the company's largest shareholder with 76% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 2.6% and 1.1% of the shares outstanding respectively, Permodalan Nasional Berhad and Kumpulan Wang Persaraan are the second and third largest shareholders.

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 Lotte Chemical Titan Holding Berhad

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.

Our information suggests that Lotte Chemical Titan Holding Berhad insiders own under 1% of the company. It has a market capitalization of just RM2.8b, and the board has only RM28m worth of shares in their own names. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 15% stake in the company, and hence can't easily be ignored. 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.

Public Company Ownership

We can see that public companies hold 76% of the Lotte Chemical Titan Holding Berhad shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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 - Lotte Chemical Titan Holding Berhad has 1 warning sign we think you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.