Key Insights

• Insiders appear to have a vested interest in Shaanxi Sirui Advanced Materials' growth, as seen by their sizeable ownership
• A total of 3 investors have a majority stake in the company with 55% ownership
• Institutions own 10% of Shaanxi Sirui Advanced Materials

A look at the shareholders of Shaanxi Sirui Advanced Materials Co., Ltd. (SHSE:688102) can tell us which group is most powerful. The group holding the most number of shares in the company, around 60% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥522m last week.

In the chart below, we zoom in on the different ownership groups of Shaanxi Sirui Advanced Materials.

What Does The Institutional Ownership Tell Us About Shaanxi Sirui Advanced Materials?

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.

Shaanxi Sirui Advanced Materials 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Shaanxi Sirui Advanced Materials' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Shaanxi Sirui Advanced Materials. With a 41% stake, CEO Wenbin Wang is the largest shareholder. For context, the second largest shareholder holds about 8.9% of the shares outstanding, followed by an ownership of 5.8% by the third-largest shareholder.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 55% stake.

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 some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Shaanxi Sirui Advanced Materials

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.

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 information suggests that insiders own more than half of Shaanxi Sirui Advanced Materials Co., Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥6.4b, that means they have CN¥3.9b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 23% stake in Shaanxi Sirui Advanced Materials. 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 7.2%, of the Shaanxi Sirui Advanced Materials 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 2 warning signs we've spotted with Shaanxi Sirui Advanced Materials .

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com