Zhe Jiang Headman Machinery Co.,Ltd. (SHSE:688577) adds CN¥351m in market cap and insiders have a 51% stake in that gain

Key Insights

• Significant insider control over Zhe Jiang Headman MachineryLtd implies vested interests in company growth
• 51% of the business is held by the top 3 shareholders
• Institutional ownership in Zhe Jiang Headman MachineryLtd is 10%

To get a sense of who is truly in control of Zhe Jiang Headman Machinery Co.,Ltd. (SHSE:688577), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 51% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥351m last week.

Let's delve deeper into each type of owner of Zhe Jiang Headman MachineryLtd, beginning with the chart below.

View our latest analysis for Zhe Jiang Headman MachineryLtd

What Does The Institutional Ownership Tell Us About Zhe Jiang Headman MachineryLtd?

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.

Zhe Jiang Headman MachineryLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Zhe Jiang Headman MachineryLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Zhe Jiang Headman MachineryLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Changquan Gao with 23% of shares outstanding. With 16% and 12% of the shares outstanding respectively, Zhaochun Gao and Xiuhua Guo are the second and third largest shareholders. Xiuhua Guo, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 Zhe Jiang Headman MachineryLtd

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.

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.

Our information suggests that insiders own more than half of Zhe Jiang Headman Machinery Co.,Ltd.. This gives them effective control of the company. So they have a CN¥1.7b stake in this CN¥3.3b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zhe Jiang Headman MachineryLtd. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 10%, of the shares on issue. 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 Zhe Jiang Headman MachineryLtd better, we need to consider many other factors. Be aware that Zhe Jiang Headman MachineryLtd is showing 6 warning signs in our investment analysis , and 2 of those are potentially serious...

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.