Key Insights

• Shanghai Sunglow Packaging TechnologyLtd's significant insider ownership suggests inherent interests in company's expansion
• The top 2 shareholders own 57% of the company
• Institutions own 15% of Shanghai Sunglow Packaging TechnologyLtd

To get a sense of who is truly in control of Shanghai Sunglow Packaging Technology Co.,Ltd (SHSE:603499), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 54% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders as a group endured the highest losses after market cap fell by CN¥722m.

In the chart below, we zoom in on the different ownership groups of Shanghai Sunglow Packaging TechnologyLtd.

What Does The Institutional Ownership Tell Us About Shanghai Sunglow Packaging TechnologyLtd?

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.

Shanghai Sunglow Packaging TechnologyLtd 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 Shanghai Sunglow Packaging TechnologyLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Shanghai Sunglow Packaging TechnologyLtd. Looking at our data, we can see that the largest shareholder is the CEO Jian Jun Dong with 49% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.2% and 5.6% of the stock.

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.

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. 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 Shanghai Sunglow Packaging TechnologyLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

It seems that insiders own more than half the Shanghai Sunglow Packaging Technology Co.,Ltd stock. This gives them a lot of power. That means they own CN¥2.4b worth of shares in the CN¥4.4b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 27% stake in Shanghai Sunglow Packaging TechnologyLtd. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shanghai Sunglow Packaging TechnologyLtd better, we need to consider many other factors. For example, we've discovered 4 warning signs for Shanghai Sunglow Packaging TechnologyLtd (2 can't be ignored!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.