Key Insights

• The considerable ownership by retail investors in Shandong Hualu-Hengsheng Chemical indicates that they collectively have a greater say in management and business strategy
• The top 13 shareholders own 50% of the company
• Institutional ownership in Shandong Hualu-Hengsheng Chemical is 24%

If you want to know who really controls Shandong Hualu-Hengsheng Chemical Co., Ltd. (SHSE:600426), then you'll have to look at the makeup of its share registry. We can see that retail investors own the lion's share in the company with 43% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, retail investors were the biggest beneficiaries of last week's 4.9% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Shandong Hualu-Hengsheng Chemical.

What Does The Institutional Ownership Tell Us About Shandong Hualu-Hengsheng Chemical?

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 Hualu-Hengsheng Chemical does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Shandong Hualu-Hengsheng Chemical's earnings history below. Of course, the future is what really matters.

Shandong Hualu-Hengsheng Chemical is not owned by hedge funds. Shandong Hualu-Hengsheng Group Co., Ltd. is currently the company's largest shareholder with 32% of shares outstanding. National Council for Social Security Fund is the second largest shareholder owning 3.2% of common stock, and Shanghai Orient Securities Asset Management Co., Ltd. holds about 2.8% of the company stock.

A closer look at our ownership figures suggests that the top 13 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Shandong Hualu-Hengsheng Chemical

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that Shandong Hualu-Hengsheng Chemical Co., Ltd. insiders own under 1% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own CN¥168m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 43% stake in Shandong Hualu-Hengsheng Chemical. 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

We can see that Private Companies own 32%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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 2 warning signs we've spotted with Shandong Hualu-Hengsheng Chemical (including 1 which is a bit unpleasant) .

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.