Key Insights

• The considerable ownership by individual investors in Shenzhen Prince New MaterialsLtd indicates that they collectively have a greater say in management and business strategy
• A total of 16 investors have a majority stake in the company with 41% ownership
• Insiders own 38% of Shenzhen Prince New MaterialsLtd

To get a sense of who is truly in control of Shenzhen Prince New Materials Co.,Ltd. (SZSE:002735), 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 59% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders who own 38% came under pressure after market cap dropped to CN¥4.0b last week,individual investors took the most losses.

In the chart below, we zoom in on the different ownership groups of Shenzhen Prince New MaterialsLtd.

What Does The Institutional Ownership Tell Us About Shenzhen Prince New MaterialsLtd?

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.

Since institutions own only a small portion of Shenzhen Prince New MaterialsLtd, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

We note that hedge funds don't have a meaningful investment in Shenzhen Prince New MaterialsLtd. The company's CEO Jinjun Wang is the largest shareholder with 28% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.6% and 2.9%, of the shares outstanding, respectively. Interestingly, the second-largest shareholder, Wujun Wang is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

A deeper look at our ownership data shows that the top 16 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 Shenzhen Prince New MaterialsLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

Our most recent data indicates that insiders own a reasonable proportion of Shenzhen Prince New Materials Co.,Ltd.. Insiders own CN¥1.5b worth of shares in the CN¥4.0b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 59% stake in Shenzhen Prince New MaterialsLtd, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

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. Be aware that Shenzhen Prince New MaterialsLtd is showing 4 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.