Weiming Zhang Shanghai Sheng Jian Environment Technology Co., Ltd.'s (SHSE:603324) CEO is the most bullish insider, and their stock value gained 12%last week

Key Insights

• Shanghai Sheng Jian Environment Technology's significant insider ownership suggests inherent interests in company's expansion
• The largest shareholder of the company is Weiming Zhang with a 72% stake
• 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 Shanghai Sheng Jian Environment Technology Co., Ltd. (SHSE:603324), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 74% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week’s 12% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Shanghai Sheng Jian Environment Technology.

Check out our latest analysis for Shanghai Sheng Jian Environment Technology

What Does The Institutional Ownership Tell Us About Shanghai Sheng Jian Environment Technology?

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.

We can see that Shanghai Sheng Jian Environment Technology does have institutional investors; and they hold a good portion of the company's stock. 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 Shanghai Sheng Jian Environment Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Shanghai Sheng Jian Environment Technology. With a 72% stake, CEO Weiming Zhang is the largest shareholder. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. In comparison, the second and third largest shareholders hold about 3.2% and 2.1% of the stock.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Shanghai Sheng Jian Environment Technology

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own the majority of Shanghai Sheng Jian Environment Technology Co., Ltd.. This means they can collectively make decisions for the company. Given it has a market cap of CN¥3.4b, that means they have CN¥2.5b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. 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 3.6%, of the Shanghai Sheng Jian Environment Technology stock. 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 - Shanghai Sheng Jian Environment Technology has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.

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.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com