Zhuhai CosMX Battery Co., Ltd.'s (SHSE:688772) last week's 5.8% decline must have disappointed individual investors who have a significant stake

Key Insights

• Significant control over Zhuhai CosMX Battery by individual investors implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 11 shareholders
• 28% of Zhuhai CosMX Battery is held by Institutions

If you want to know who really controls Zhuhai CosMX Battery Co., Ltd. (SHSE:688772), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual investors with 32% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, individual investors endured the biggest losses as the stock fell by 5.8%.

In the chart below, we zoom in on the different ownership groups of Zhuhai CosMX Battery.

View our latest analysis for Zhuhai CosMX Battery

What Does The Institutional Ownership Tell Us About Zhuhai CosMX Battery?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Zhuhai CosMX Battery 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 Zhuhai CosMX Battery's historic earnings and revenue below, but keep in mind there's always more to the story.

Zhuhai CosMX Battery is not owned by hedge funds. The company's largest shareholder is Zhuhai Puruida Investment Co., Ltd., with ownership of 18%. Beijing Dongfang Huijia Fund Management Co., Ltd. is the second largest shareholder owning 8.2% of common stock, and Chongqing Puruida Enterprise Management Co., Ltd. holds about 5.7% of the company stock.

After doing some more digging, we found that the top 11 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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

Insider Ownership Of Zhuhai CosMX Battery

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

We can report that insiders do own shares in Zhuhai CosMX Battery Co., Ltd.. The insiders have a meaningful stake worth CN¥241m. Most would see this as a real positive. It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 32% stake in Zhuhai CosMX Battery. 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 Equity Ownership

Private equity firms hold a 8.2% stake in Zhuhai CosMX Battery. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

It seems that Private Companies own 31%, of the Zhuhai CosMX Battery 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Zhuhai CosMX Battery (of which 1 shouldn't be ignored!) you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.