Key Insights

• The considerable ownership by private companies in Shandong Dawn PolymerLtd indicates that they collectively have a greater say in management and business strategy
• 62% of the business is held by the top 2 shareholders
• 18% of Shandong Dawn PolymerLtd is held by insiders

To get a sense of who is truly in control of Shandong Dawn Polymer Co.,Ltd. (SZSE:002838), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies with 45% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 9.9% decline in share price, private companies suffered the most losses.

Let's delve deeper into each type of owner of Shandong Dawn PolymerLtd, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Shandong Dawn PolymerLtd?

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.

We can see that Shandong Dawn PolymerLtd does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Shandong Dawn PolymerLtd, (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 Shandong Dawn PolymerLtd. Looking at our data, we can see that the largest shareholder is Dawn Group Co. Ltd with 45% of shares outstanding. Limei Han is the second largest shareholder owning 17% of common stock, and Shanghai Youyou Wealth Investment Management Co., Ltd. holds about 2.3% of the company stock.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 Shandong Dawn PolymerLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our information suggests that insiders maintain a significant holding in Shandong Dawn Polymer Co.,Ltd.. Insiders have a CN¥697m stake in this CN¥4.0b business. 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 26% stake in Shandong Dawn PolymerLtd. 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 45%, of the shares on issue. 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:

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. To that end, you should learn about the 3 warning signs we've spotted with Shandong Dawn PolymerLtd (including 1 which is a bit unpleasant) .

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

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