Private companies among Zhejiang Development Group Co.,Ltd's (SZSE:000906) largest stockholders and were hit after last week's 9.5% price drop

Key Insights

• Significant control over Zhejiang Development GroupLtd by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 3 shareholders own 51% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Zhejiang Development Group Co.,Ltd (SZSE:000906) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 51% ownership. 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 9.5%.

In the chart below, we zoom in on the different ownership groups of Zhejiang Development GroupLtd.

See our latest analysis for Zhejiang Development GroupLtd

What Does The Institutional Ownership Tell Us About Zhejiang Development GroupLtd?

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.

Zhejiang Development GroupLtd 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. 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 Development GroupLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Zhejiang Development GroupLtd. Our data shows that Zhejiang Communications Investment Group Co.,Ltd. is the largest shareholder with 44% of shares outstanding. Hangzhou Tongxi Economic and Trade Co., Ltd. is the second largest shareholder owning 4.7% of common stock, and Hu'nan Tongli Investment Co., Ltd. holds about 2.6% of the company stock.

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.

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 Zhejiang Development GroupLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

We can see that insiders own shares in Zhejiang Development Group Co.,Ltd. In their own names, insiders own CN¥60m worth of stock in the CN¥4.2b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zhejiang Development GroupLtd. 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 Company Ownership

We can see that Private Companies own 51%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Zhejiang Development GroupLtd better, we need to consider many other factors. Take risks for example - Zhejiang Development GroupLtd has 4 warning signs (and 2 which make us uncomfortable) we think you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.