Individual investors invested in Nantong Acetic Acid Chemical Co., Ltd. (SHSE:603968) up 12% last week, insiders too were rewarded

Simply Wall St · 03/11 22:46

Key Insights

  • Significant control over Nantong Acetic Acid Chemical by individual investors implies that the general public has more power to influence management and governance-related decisions
  • 50% of the business is held by the top 21 shareholders
  • 30% of Nantong Acetic Acid Chemical is held by insiders

Every investor in Nantong Acetic Acid Chemical Co., Ltd. (SHSE:603968) should be aware of the most powerful shareholder groups. With 50% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While individual investors were the group that benefitted the most from last week’s CN¥249m market cap gain, insiders too had a 30% share in those profits.

In the chart below, we zoom in on the different ownership groups of Nantong Acetic Acid Chemical.

View our latest analysis for Nantong Acetic Acid Chemical

ownership-breakdown
SHSE:603968 Ownership Breakdown March 11th 2025

What Does The Institutional Ownership Tell Us About Nantong Acetic Acid Chemical?

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.

Institutions have a very small stake in Nantong Acetic Acid Chemical. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

earnings-and-revenue-growth
SHSE:603968 Earnings and Revenue Growth March 11th 2025

We note that hedge funds don't have a meaningful investment in Nantong Acetic Acid Chemical. The company's largest shareholder is Qing Quan Gu, with ownership of 8.9%. Nantong City Construction Group Co., Ltd. is the second largest shareholder owning 8.6% of common stock, and Nantong Industries Holding Group Co.Ltd. holds about 7.7% of the company stock. Additionally, the company's CEO Xin Nan Yu directly holds 0.5% of the total shares outstanding.

A deeper look at our ownership data shows that the top 21 shareholders collectively hold less than half of the register, suggesting a large group of small holders where 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. 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 Nantong Acetic Acid Chemical

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

It seems insiders own a significant proportion of Nantong Acetic Acid Chemical Co., Ltd.. Insiders have a CN¥709m stake in this CN¥2.4b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 50% stake in Nantong Acetic Acid Chemical, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

Our data indicates that Private Companies hold 16%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Nantong Acetic Acid Chemical better, we need to consider many other factors. Take risks for example - Nantong Acetic Acid Chemical has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.

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.