Key Insights

• Significant control over Chaozhou Three-Circle (Group)Ltd by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 15 investors have a majority stake in the company with 50% ownership
• Institutions own 22% of Chaozhou Three-Circle (Group)Ltd

To get a sense of who is truly in control of Chaozhou Three-Circle (Group) Co.,Ltd. (SZSE:300408), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 40% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, individual investors collectively scored the highest last week as the company hit CN¥47b market cap following a 8.1% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Chaozhou Three-Circle (Group)Ltd.

What Does The Institutional Ownership Tell Us About Chaozhou Three-Circle (Group)Ltd?

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.

As you can see, institutional investors have a fair amount of stake in Chaozhou Three-Circle (Group)Ltd. 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 Chaozhou Three-Circle (Group)Ltd's earnings history below. Of course, the future is what really matters.

Chaozhou Three-Circle (Group)Ltd is not owned by hedge funds. The company's largest shareholder is Chaozhou Sanjiang Investment Co. Ltd., with ownership of 34%. With 2.8% and 2.7% of the shares outstanding respectively, Wan Zhen Zhang and E Fund Management Co., Ltd. are the second and third largest shareholders.

After doing some more digging, we found that the top 15 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over 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 Chaozhou Three-Circle (Group)Ltd

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.

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.

We can see that insiders own shares in Chaozhou Three-Circle (Group) Co.,Ltd.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around CN¥2.2b worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 40% 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 34%, of the Chaozhou Three-Circle (Group)Ltd stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Chaozhou Three-Circle (Group)Ltd better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Chaozhou Three-Circle (Group)Ltd 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.