Key Insights

• Insiders appear to have a vested interest in NanJing Sanchao Advanced MaterialsLtd's growth, as seen by their sizeable ownership
• A total of 2 investors have a majority stake in the company with 51% ownership
• 10% of NanJing Sanchao Advanced MaterialsLtd is held by Institutions

To get a sense of who is truly in control of NanJing Sanchao Advanced Materials Co.,Ltd. (SZSE:300554), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 52% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥372m last week.

Let's delve deeper into each type of owner of NanJing Sanchao Advanced MaterialsLtd, beginning with the chart below.

What Does The Institutional Ownership Tell Us About NanJing Sanchao Advanced MaterialsLtd?

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.

As you can see, institutional investors have a fair amount of stake in NanJing Sanchao Advanced MaterialsLtd. 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. 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 NanJing Sanchao Advanced MaterialsLtd, (below). Of course, keep in mind that there are other factors to consider, too.

NanJing Sanchao Advanced MaterialsLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Yu Yao Zou with 41% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.7% and 2.6% of the stock.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 NanJing Sanchao Advanced 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. 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.

Our most recent data indicates that insiders own the majority of NanJing Sanchao Advanced Materials Co.,Ltd.. This means they can collectively make decisions for the company. Given it has a market cap of CN¥2.6b, that means they have CN¥1.3b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 38% 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand NanJing Sanchao Advanced MaterialsLtd better, we need to consider many other factors. For instance, we've identified 2 warning signs for NanJing Sanchao Advanced MaterialsLtd (1 is a bit concerning) that you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.