Key Insights

• Insiders appear to have a vested interest in Shanghai Aladdin Biochemical TechnologyLtd's growth, as seen by their sizeable ownership
• 60% of the business is held by the top 2 shareholders
• Institutional ownership in Shanghai Aladdin Biochemical TechnologyLtd is 18%

To get a sense of who is truly in control of Shanghai Aladdin Biochemical Technology Co.,Ltd. (SHSE:688179), it is important to understand the ownership structure of the business. With 60% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, insiders endured the biggest losses as the stock fell by 10%.

Let's delve deeper into each type of owner of Shanghai Aladdin Biochemical TechnologyLtd, beginning with the chart below.

Check out our latest analysis for Shanghai Aladdin Biochemical TechnologyLtd

What Does The Institutional Ownership Tell Us About Shanghai Aladdin Biochemical TechnologyLtd?

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.

As you can see, institutional investors have a fair amount of stake in Shanghai Aladdin Biochemical TechnologyLtd. 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. 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 Shanghai Aladdin Biochemical TechnologyLtd, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Shanghai Aladdin Biochemical TechnologyLtd. The company's CEO Jiuzhen Xu is the largest shareholder with 39% of shares outstanding. In comparison, the second and third largest shareholders hold about 21% and 4.3% of the stock. Interestingly, the second-largest shareholder, Liping Zhao is also Other Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Shanghai Aladdin Biochemical TechnologyLtd

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.

It seems that insiders own more than half the Shanghai Aladdin Biochemical Technology Co.,Ltd. stock. This gives them a lot of power. Given it has a market cap of CN¥3.5b, that means they have CN¥2.1b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 17% stake in Shanghai Aladdin Biochemical TechnologyLtd. 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

We can see that Private Companies own 5.4%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Shanghai Aladdin Biochemical TechnologyLtd (of which 1 is a bit unpleasant!) you should know about.

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.

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