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
• 45% of the business is held by the top 23 shareholders
• 37% of Shenzhen Prince New MaterialsLtd is held by insiders

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. We can see that individual investors own the lion's share in the company with 55% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of individual investors took a hit after last week's 12% price drop, insiders with their 37% also suffered.

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?

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.

As you can see, institutional investors have a fair amount of stake in Shenzhen Prince New MaterialsLtd. 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 Shenzhen Prince New MaterialsLtd'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 Shenzhen Prince New MaterialsLtd. Looking at our data, we can see that the largest shareholder is the CEO Jinjun Wang with 28% of shares outstanding. Wujun Wang is the second largest shareholder owning 4.6% of common stock, and Xiaojun Wang holds about 2.9% of the company stock. 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 23 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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

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.

It seems insiders own a significant proportion of Shenzhen Prince New Materials Co.,Ltd.. It has a market capitalization of just CN¥3.5b, and insiders have CN¥1.3b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 55% of Shenzhen Prince New MaterialsLtd shares. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for Shenzhen Prince New MaterialsLtd that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.