Key Insights

• The considerable ownership by retail investors in Jiangsu HSC New Energy MaterialsLTD indicates that they collectively have a greater say in management and business strategy
• The top 5 shareholders own 52% of the company
• 17% of Jiangsu HSC New Energy MaterialsLTD is held by insiders

Every investor in Jiangsu HSC New Energy Materials Co.,LTD. (SHSE:688353) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 31% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, retail investors benefitted the most after the company's market cap rose by CN¥359m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Jiangsu HSC New Energy MaterialsLTD.

What Does The Institutional Ownership Tell Us About Jiangsu HSC New Energy MaterialsLTD?

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 Jiangsu HSC New Energy MaterialsLTD does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Jiangsu HSC New Energy MaterialsLTD's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Jiangsu HSC New Energy MaterialsLTD. Our data shows that Suzhou Dunxing Investment Management Co., Ltd. is the largest shareholder with 18% of shares outstanding. For context, the second largest shareholder holds about 15% of the shares outstanding, followed by an ownership of 11% by the third-largest shareholder. Jinliang Shen, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. In addition, we found that Ming Shen, the CEO has 3.7% of the shares allocated to their name.

On looking further, we found that 52% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. 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 Jiangsu HSC New Energy MaterialsLTD

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.

Our most recent data indicates that insiders own a reasonable proportion of Jiangsu HSC New Energy Materials Co.,LTD.. Insiders have a CN¥539m stake in this CN¥3.1b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. 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 31% stake in Jiangsu HSC New Energy MaterialsLTD. 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.

Private Equity Ownership

With a stake of 18%, private equity firms could influence the Jiangsu HSC New Energy MaterialsLTD board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

We can see that Private Companies own 21%, of the shares on issue. 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:

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 - Jiangsu HSC New Energy MaterialsLTD has 1 warning sign we think you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.