Zhejiang Goldensea Hi-Tech Co., Ltd's (SHSE:603311) last week's 11% decline must have disappointed private companies who have a significant stake

Key Insights

• Significant control over Zhejiang Goldensea Hi-Tech by private companies implies that the general public has more power to influence management and governance-related decisions
• 53% of the business is held by the top 3 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Zhejiang Goldensea Hi-Tech Co., Ltd (SHSE:603311), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 50% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, private companies endured the biggest losses as the stock fell by 11%.

Let's take a closer look to see what the different types of shareholders can tell us about Zhejiang Goldensea Hi-Tech.

View our latest analysis for Zhejiang Goldensea Hi-Tech

What Does The Institutional Ownership Tell Us About Zhejiang Goldensea Hi-Tech?

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.

We can see that Zhejiang Goldensea Hi-Tech does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Zhejiang Goldensea Hi-Tech's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Zhejiang Goldensea Hi-Tech. Hoto Group Ltd. is currently the largest shareholder, with 45% of shares outstanding. With 4.5% and 3.1% of the shares outstanding respectively, Zhejiang Zhuji 33 Investment Co., Ltd. and Caitong Fund Management Co., Ltd. are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.

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. 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 Zhejiang Goldensea Hi-Tech

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

We can see that insiders own shares in Zhejiang Goldensea Hi-Tech Co., Ltd. As individuals, the insiders collectively own CN¥92m worth of the CN¥1.9b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zhejiang Goldensea Hi-Tech. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 50%, of the Zhejiang Goldensea Hi-Tech stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 3 warning signs for Zhejiang Goldensea Hi-Tech (1 is significant!) that you should be aware of before investing here.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.