Shiny Chemical Industrial Co., Ltd.'s (TWSE:1773) stock price dropped 7.1% last week; private companies would not be happy

Key Insights

• Shiny Chemical Industrial's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 4 investors have a majority stake in the company with 50% ownership
• Insider ownership in Shiny Chemical Industrial is 10%

Every investor in Shiny Chemical Industrial Co., Ltd. (TWSE:1773) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 48% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 7.1% decline in share price, private companies suffered the most losses.

Let's delve deeper into each type of owner of Shiny Chemical Industrial, beginning with the chart below.

See our latest analysis for Shiny Chemical Industrial

What Does The Institutional Ownership Tell Us About Shiny Chemical Industrial?

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.

Shiny Chemical Industrial already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Shiny Chemical Industrial, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Shiny Chemical Industrial. Our data shows that Ninghan Enterprise Co., Ltd. is the largest shareholder with 31% of shares outstanding. With 12% and 3.6% of the shares outstanding respectively, Yu Kuo Plywood Corp. and Mingjing Investment Co., Ltd. are the second and third largest shareholders.

On looking further, we found that 50% of the shares are owned by the top 4 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Shiny Chemical Industrial

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 Shiny Chemical Industrial Co., Ltd.. It has a market capitalization of just NT$39b, and insiders have NT$4.1b worth of shares in their own names. That's quite significant. 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 34% stake in the company, and hence can't easily be ignored. 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

It seems that Private Companies own 48%, of the Shiny Chemical Industrial stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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 instance, we've identified 2 warning signs for Shiny Chemical Industrial that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.