Private companies invested in Zhejiang Sanhua Intelligent Controls Co.,Ltd (SZSE:002050) copped the brunt of last week's CN¥7.5b market cap decline

Key Insights

• Zhejiang Sanhua Intelligent ControlsLtd's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 6 investors have a majority stake in the company with 51% ownership
• Institutions own 22% of Zhejiang Sanhua Intelligent ControlsLtd

A look at the shareholders of Zhejiang Sanhua Intelligent Controls Co.,Ltd (SZSE:002050) can tell us which group is most powerful. The group holding the most number of shares in the company, around 45% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies as a group endured the highest losses last week after market cap fell by CN¥7.5b.

Let's take a closer look to see what the different types of shareholders can tell us about Zhejiang Sanhua Intelligent ControlsLtd.

See our latest analysis for Zhejiang Sanhua Intelligent ControlsLtd

What Does The Institutional Ownership Tell Us About Zhejiang Sanhua Intelligent ControlsLtd?

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.

Zhejiang Sanhua Intelligent ControlsLtd 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 Zhejiang Sanhua Intelligent ControlsLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Zhejiang Sanhua Intelligent ControlsLtd is not owned by hedge funds. Our data shows that Sanhua Holding Group Co., Ltd. is the largest shareholder with 26% of shares outstanding. For context, the second largest shareholder holds about 20% of the shares outstanding, followed by an ownership of 1.7% by the third-largest shareholder. Additionally, the company's CEO Yabo Zhang directly holds 1.0% of the total shares outstanding.

We did some more digging and found that 6 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Zhejiang Sanhua Intelligent ControlsLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Shareholders would probably be interested to learn that insiders own shares in Zhejiang Sanhua Intelligent Controls Co.,Ltd. Insiders own CN¥874m worth of shares (at current prices). 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 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zhejiang Sanhua Intelligent ControlsLtd. 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

Our data indicates that Private Companies hold 45%, of the company's shares. 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 Sanhua Intelligent ControlsLtd better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Zhejiang Sanhua Intelligent ControlsLtd 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.