Key Insights

• The considerable ownership by retail investors in Sichuan Development LomonLtd indicates that they collectively have a greater say in management and business strategy
• The top 12 shareholders own 50% of the company
• Insider ownership in Sichuan Development LomonLtd is 18%

Every investor in Sichuan Development Lomon Co.,Ltd. (SZSE:002312) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 48% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, retail investors benefitted the most after the company's market cap rose by CN¥1.3b last week.

Let's take a closer look to see what the different types of shareholders can tell us about Sichuan Development LomonLtd.

What Does The Institutional Ownership Tell Us About Sichuan Development LomonLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Sichuan Development LomonLtd. 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. 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 Sichuan Development LomonLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Sichuan Development LomonLtd. Sichuan Development Holding Co.,Ltd. is currently the largest shareholder, with 26% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 17% and 2.0%, of the shares outstanding, respectively.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 12 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Sichuan Development LomonLtd

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of Sichuan Development Lomon Co.,Ltd.. It is very interesting to see that insiders have a meaningful CN¥2.4b stake in this CN¥13b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 48% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sichuan Development LomonLtd. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 28%, 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. Take risks for example - Sichuan Development LomonLtd has 3 warning signs (and 1 which is concerning) we think you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.