Zhejiang Sanhua Intelligent Controls Co.,Ltd's (SZSE:002050) market cap touched CN¥87b last week, benefiting both private companies who own 46% as well as institutions

Key Insights

• The considerable ownership by private companies in Zhejiang Sanhua Intelligent ControlsLtd indicates that they collectively have a greater say in management and business strategy
• A total of 3 investors have a majority stake in the company with 61% ownership
• Institutions own 43% of Zhejiang Sanhua Intelligent ControlsLtd

If you want to know who really controls Zhejiang Sanhua Intelligent Controls Co.,Ltd (SZSE:002050), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 46% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Private companies gained the most after market cap touched CN¥87b last week, while institutions who own 43% also benefitted.

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

As you can see, institutional investors have a fair amount of stake in Zhejiang Sanhua Intelligent ControlsLtd. 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 Sanhua Intelligent ControlsLtd'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 Sanhua Intelligent ControlsLtd. Sanhua Holding Group Co., Ltd. is currently the company's largest shareholder with 26% of shares outstanding. Zhejiang Sanhua Lvneng Industrial Group Co., Ltd. is the second largest shareholder owning 20% of common stock, and Hong Kong Exchanges & Clearing Limited, Asset Management Arm holds about 16% of the company stock. In addition, we found that Yabo Zhang, the CEO has 1.1% of the shares allocated to their name.

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 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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

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. 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 Sanhua Intelligent Controls Co.,Ltd. It is a very large company, and board members collectively own CN¥947m worth of shares (at current prices). Most would say this shows a good alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

With a 10% 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

It seems that Private Companies own 46%, of the Zhejiang Sanhua Intelligent ControlsLtd stock. 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. Case in point: We've spotted 2 warning signs for Zhejiang Sanhua Intelligent ControlsLtd you should be aware of.

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.