Key Insights

• Significant control over Shenzhen Cotran New MaterialLtd by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 23 investors have a majority stake in the company with 48% ownership
• Institutional ownership in Shenzhen Cotran New MaterialLtd is 16%

If you want to know who really controls Shenzhen Cotran New Material Co.,Ltd. (SZSE:300731), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 52% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 17% decline in share price, retail investors suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Shenzhen Cotran New MaterialLtd.

What Does The Institutional Ownership Tell Us About Shenzhen Cotran New MaterialLtd?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Shenzhen Cotran New MaterialLtd. 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 Shenzhen Cotran New MaterialLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Shenzhen Cotran New MaterialLtd. Shenzhen Kechuang Xinhua Technology Co., Ltd. is currently the company's largest shareholder with 20% of shares outstanding. Dong Zhou is the second largest shareholder owning 6.6% of common stock, and Guangzhou Xingcheng Private Equity Securities Investment Management Co., Ltd. holds about 6.5% of the company stock. Dong Zhou, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

On studying our ownership data, we found that 23 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Shenzhen Cotran New MaterialLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

We can see that insiders own shares in Shenzhen Cotran New Material Co.,Ltd.. As individuals, the insiders collectively own CN¥145m worth of the CN¥2.0b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 52% of Shenzhen Cotran New MaterialLtd. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

We can see that Private Companies own 23%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Shenzhen Cotran New MaterialLtd better, we need to consider many other factors. For example, we've discovered 4 warning signs for Shenzhen Cotran New MaterialLtd (2 don't sit too well with us!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. So take a peek at this free 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.