Key Insights

• Zhejiang Sanmei Chemical IndustryLtd's significant insider ownership suggests inherent interests in company's expansion
• The top 2 shareholders own 55% of the company
• 11% of Zhejiang Sanmei Chemical IndustryLtd is held by Institutions

If you want to know who really controls Zhejiang Sanmei Chemical Industry Co.,Ltd. (SHSE:603379), then you'll have to look at the makeup of its share registry. With 58% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit CN¥24b market cap following a 3.2% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Zhejiang Sanmei Chemical IndustryLtd.

What Does The Institutional Ownership Tell Us About Zhejiang Sanmei Chemical IndustryLtd?

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.

We can see that Zhejiang Sanmei Chemical IndustryLtd does have institutional investors; and they hold a good portion of the company's stock. 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 Zhejiang Sanmei Chemical IndustryLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Zhejiang Sanmei Chemical IndustryLtd is not owned by hedge funds. The company's largest shareholder is Rongda Hu, with ownership of 38%. Meanwhile, the second and third largest shareholders, hold 17% and 8.0%, of the shares outstanding, respectively. Qixiang Hu, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 55% stake.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Zhejiang Sanmei Chemical IndustryLtd

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

It seems that insiders own more than half the Zhejiang Sanmei Chemical Industry Co.,Ltd. stock. This gives them a lot of power. Insiders own CN¥14b worth of shares in the CN¥24b company. That's extraordinary! Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public, who are usually individual investors, hold a 21% stake in Zhejiang Sanmei Chemical IndustryLtd. 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

We can see that Private Companies own 8.7%, of the shares on issue. 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:

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 1 warning sign for Zhejiang Sanmei Chemical IndustryLtd that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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