Zhengping Road & Bridge Construction Co.,Ltd.'s (SHSE:603843) 11% gain last week benefited both retail investors who own 58% as well as insiders

Key Insights

• Significant control over Zhengping Road & Bridge ConstructionLtd by retail investors implies that the general public has more power to influence management and governance-related decisions
• 42% of the business is held by the top 14 shareholders
• 28% of Zhengping Road & Bridge ConstructionLtd is held by insiders

To get a sense of who is truly in control of Zhengping Road & Bridge Construction Co.,Ltd. (SHSE:603843), it is important to understand the ownership structure of the business. With 58% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While retail investors were the group that reaped the most benefits after last week’s 11% price gain, insiders also received a 28% cut.

Let's take a closer look to see what the different types of shareholders can tell us about Zhengping Road & Bridge ConstructionLtd.

See our latest analysis for Zhengping Road & Bridge ConstructionLtd

What Does The Institutional Ownership Tell Us About Zhengping Road & Bridge ConstructionLtd?

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 Zhengping Road & Bridge ConstructionLtd 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 Zhengping Road & Bridge ConstructionLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Zhengping Road & Bridge ConstructionLtd is not owned by hedge funds. Shengguang Jin is currently the company's largest shareholder with 19% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.6% and 5.0% of the stock.

On studying our ownership data, we found that 14 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Zhengping Road & Bridge ConstructionLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 a reasonable proportion of Zhengping Road & Bridge Construction Co.,Ltd.. Insiders have a CN¥708m stake in this CN¥2.6b 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 58% stake in Zhengping Road & Bridge ConstructionLtd, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Zhengping Road & Bridge ConstructionLtd (at least 2 which are potentially serious) , and understanding them should be part of your investment process.

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.