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Insiders Were the Biggest Winners as Shanghai Yongguan Adhesive Products Corp., Ltd.'s (SHSE:603681) Market Cap Grew by CN¥363m Last Week

Simply Wall St ·  08/31 06:50

If you want to know who really controls Shanghai Yongguan Adhesive Products Corp., Ltd. (SHSE:603681), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 49% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥363m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Shanghai Yongguan Adhesive Products.

Check out our latest analysis for Shanghai Yongguan Adhesive Products

ownership-breakdownSHSE:603681 Ownership Breakdown August 30th 2022

What Does The Institutional Ownership Tell Us About Shanghai Yongguan Adhesive Products?

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.

Shanghai Yongguan Adhesive Products already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Shanghai Yongguan Adhesive Products, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growthSHSE:603681 Earnings and Revenue Growth August 30th 2022

Hedge funds don't have many shares in Shanghai Yongguan Adhesive Products. The company's largest shareholder is Xinmin Lu, with ownership of 41%. In comparison, the second and third largest shareholders hold about 7.8% and 3.7% of the stock.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Shanghai Yongguan Adhesive Products

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own a reasonable proportion of Shanghai Yongguan Adhesive Products Corp., Ltd.. Insiders own CN¥2.9b worth of shares in the CN¥6.0b company. 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

With a 32% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shanghai Yongguan Adhesive Products. 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

Our data indicates that Private Companies hold 7.4%, 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. For instance, we've identified 4 warning signs for Shanghai Yongguan Adhesive Products (1 is a bit unpleasant) that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

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

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