Key Insights

• The considerable ownership by private companies in Jinsanjiang (Zhaoqing) Silicon Material indicates that they collectively have a greater say in management and business strategy
• A total of 2 investors have a majority stake in the company with 56% ownership
• Insider ownership in Jinsanjiang (Zhaoqing) Silicon Material is 14%

To get a sense of who is truly in control of Jinsanjiang (Zhaoqing) Silicon Material Company Limited (SZSE:301059), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 58% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, private companies endured the biggest losses as the stock fell by 13%.

In the chart below, we zoom in on the different ownership groups of Jinsanjiang (Zhaoqing) Silicon Material.

See our latest analysis for Jinsanjiang (Zhaoqing) Silicon Material

What Does The Institutional Ownership Tell Us About Jinsanjiang (Zhaoqing) Silicon Material?

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 Jinsanjiang (Zhaoqing) Silicon Material. 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 Jinsanjiang (Zhaoqing) Silicon Material's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Jinsanjiang (Zhaoqing) Silicon Material. The company's largest shareholder is Guangzhou Feixue Group Co., Ltd., with ownership of 44%. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 7.0% by the third-largest shareholder. Zhenxue Ren, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 56% stake.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Jinsanjiang (Zhaoqing) Silicon Material

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

It seems insiders own a significant proportion of Jinsanjiang (Zhaoqing) Silicon Material Company Limited. It has a market capitalization of just CN¥2.7b, and insiders have CN¥380m worth of shares in their own names. 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, who are usually individual investors, hold a 22% stake in Jinsanjiang (Zhaoqing) Silicon Material. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 58%, of the company's shares. 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:

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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Jinsanjiang (Zhaoqing) Silicon Material , and understanding them should be part of your investment process.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.