Key Insights

• Significant control over Kaili Catalyst & New MaterialsLtd by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 7 shareholders own 51% of the company
• 11% of Kaili Catalyst & New MaterialsLtd is held by insiders

If you want to know who really controls Kaili Catalyst & New Materials Co.,Ltd. (SHSE:688269), then you'll have to look at the makeup of its share registry. With 29% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, retail investors were the biggest beneficiaries of last week's 8.3% gain.

In the chart below, we zoom in on the different ownership groups of Kaili Catalyst & New MaterialsLtd.

See our latest analysis for Kaili Catalyst & New MaterialsLtd

What Does The Institutional Ownership Tell Us About Kaili Catalyst & New MaterialsLtd?

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 Kaili Catalyst & New MaterialsLtd. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Kaili Catalyst & 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 Kaili Catalyst & New MaterialsLtd. The company's largest shareholder is Northwest Institute for Non-Ferrous Metal Research, with ownership of 26%. Bank of Communications Schroder Fund Management Co., Ltd. is the second largest shareholder owning 6.3% of common stock, and National Council for Social Security Fund holds about 5.6% of the company stock. Additionally, the company's CEO Yongkang Zeng directly holds 1.0% of the total shares outstanding.

We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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

Insider Ownership Of Kaili Catalyst & 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. 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 Kaili Catalyst & New Materials Co.,Ltd.. Insiders own CN¥611m worth of shares in the CN¥5.6b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 29% stake in the company, and hence can't easily be ignored. 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 28%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private 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. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Kaili Catalyst & New MaterialsLtd (of which 1 doesn't sit too well with us!) you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

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.