Key Insights

• Significant control over Shanghai CarthaneLtd by retail investors implies that the general public has more power to influence management and governance-related decisions
• 45% of the business is held by the top 23 shareholders
• Insider ownership in Shanghai CarthaneLtd is 33%

To get a sense of who is truly in control of Shanghai Carthane Co.,Ltd. (SHSE:603037), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 55% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 15% increase in the stock price last week, retail investors profited the most, but insiders who own 33% stock also stood to gain from the increase.

Let's delve deeper into each type of owner of Shanghai CarthaneLtd, beginning with the chart below.

What Does The Lack Of Institutional Ownership Tell Us About Shanghai CarthaneLtd?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Shanghai CarthaneLtd, for yourself, below.

Hedge funds don't have many shares in Shanghai CarthaneLtd. Ying Tao Yang is currently the largest shareholder, with 10% of shares outstanding. Sinochem Holdings Corporation Ltd. is the second largest shareholder owning 9.9% of common stock, and Jian Gang Yang holds about 6.7% of the company stock. Jian Gang Yang, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. Furthermore, CEO Zhen Kun Hou is the owner of 6.6% of the company's shares.

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.

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 Shanghai CarthaneLtd

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.

Our most recent data indicates that insiders own a reasonable proportion of Shanghai Carthane Co.,Ltd.. Insiders own CN¥1.0b worth of shares in the CN¥3.1b company. 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

The general public -- including retail investors -- own 55% of Shanghai CarthaneLtd. 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.

Private Company Ownership

We can see that Private Companies own 9.9%, 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 Shanghai CarthaneLtd better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Shanghai CarthaneLtd .

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.