Private companies are Shanghai Rural Commercial Bank Co., Ltd.'s (SHSE:601825) biggest owners and were hit after market cap dropped CN¥2.7b

Key Insights

• The considerable ownership by private companies in Shanghai Rural Commercial Bank indicates that they collectively have a greater say in management and business strategy
• A total of 8 investors have a majority stake in the company with 54% ownership
• 18% of Shanghai Rural Commercial Bank is held by Institutions

Every investor in Shanghai Rural Commercial Bank Co., Ltd. (SHSE:601825) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 35% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, private companies endured the biggest losses as the stock fell by 3.4%.

In the chart below, we zoom in on the different ownership groups of Shanghai Rural Commercial Bank.

See our latest analysis for Shanghai Rural Commercial Bank

What Does The Institutional Ownership Tell Us About Shanghai Rural Commercial Bank?

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 Rural Commercial Bank already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Shanghai Rural Commercial Bank's historic earnings and revenue below, but keep in mind there's always more to the story.

Shanghai Rural Commercial Bank is not owned by hedge funds. Shanghai International Group Co.,Ltd. is currently the company's largest shareholder with 9.3% of shares outstanding. The second and third largest shareholders are Baoshan Iron & Steel Co., Ltd. and China COSCO Shipping Corporation Limited, with an equal amount of shares to their name at 8.3%.

We did some more digging and found that 8 of the top shareholders account for roughly 54% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Shanghai Rural Commercial Bank

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.

Our information suggests that Shanghai Rural Commercial Bank Co., Ltd. insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own CN¥45m worth of shares (at current prices). Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in Shanghai Rural Commercial Bank. 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

It seems that Private Companies own 35%, of the Shanghai Rural Commercial Bank stock. 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.

Public Company Ownership

It appears to us that public companies own 8.3% of Shanghai Rural Commercial Bank. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for Shanghai Rural Commercial Bank 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.