Key Insights

• Shenzhen SunXing Light Alloys MaterialsLtd's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 50% of the business is held by the top 13 shareholders
• Insiders own 23% of Shenzhen SunXing Light Alloys MaterialsLtd

Every investor in Shenzhen SunXing Light Alloys Materials Co.,Ltd. (SHSE:603978) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 48% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Retail investors gained the most after market cap touched CN¥3.8b last week, while insiders who own 23% also benefitted.

In the chart below, we zoom in on the different ownership groups of Shenzhen SunXing Light Alloys MaterialsLtd.

What Does The Institutional Ownership Tell Us About Shenzhen SunXing Light Alloys 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.

Shenzhen SunXing Light Alloys MaterialsLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Shenzhen SunXing Light Alloys MaterialsLtd, (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 Shenzhen SunXing Light Alloys MaterialsLtd. Looking at our data, we can see that the largest shareholder is the CEO Xuemin Chen with 18% of shares outstanding. With 12% and 7.4% of the shares outstanding respectively, Shenzhen Yandai Investment Co., Ltd. and Shenzhen Huike Light Metal Research Development And Management Co., Ltd. are the second and third largest shareholders.

After doing some more digging, we found that the top 13 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Shenzhen SunXing Light Alloys MaterialsLtd

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.

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 insiders own a significant proportion of Shenzhen SunXing Light Alloys Materials Co.,Ltd.. Insiders have a CN¥882m stake in this CN¥3.8b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 48% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shenzhen SunXing Light Alloys 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 Company Ownership

Our data indicates that Private Companies hold 20%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Shenzhen SunXing Light Alloys MaterialsLtd better, we need to consider many other factors. Take risks for example - Shenzhen SunXing Light Alloys MaterialsLtd has 4 warning signs (and 2 which shouldn't be ignored) we think you should know about.

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.