Individual investors are China Zhonghua Geotechnical Engineering Group Co., Ltd.'s (SZSE:002542) biggest owners and were rewarded after market cap rose by CN¥289m last week

Key Insights

• Significant control over China Zhonghua Geotechnical Engineering Group by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 19 investors have a majority stake in the company with 48% ownership
• Insiders own 18% of China Zhonghua Geotechnical Engineering Group

If you want to know who really controls China Zhonghua Geotechnical Engineering Group Co., Ltd. (SZSE:002542), 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 52% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, individual investors benefitted the most after the company's market cap rose by CN¥289m last week.

Let's delve deeper into each type of owner of China Zhonghua Geotechnical Engineering Group, beginning with the chart below.

See our latest analysis for China Zhonghua Geotechnical Engineering Group

What Does The Lack Of Institutional Ownership Tell Us About China Zhonghua Geotechnical Engineering Group?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. China Zhonghua Geotechnical Engineering Group's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

We note that hedge funds don't have a meaningful investment in China Zhonghua Geotechnical Engineering Group. Our data shows that Chengdu Xingcheng Investment Group Co.Ltd. is the largest shareholder with 29% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 1.8%, of the shares outstanding, respectively. Zhongchi Liu, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

A deeper look at our ownership data shows that the top 19 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 China Zhonghua Geotechnical Engineering Group

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.

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.

Our information suggests that insiders maintain a significant holding in China Zhonghua Geotechnical Engineering Group Co., Ltd.. Insiders have a CN¥519m stake in this CN¥2.8b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 52% of China Zhonghua Geotechnical Engineering Group. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

Our data indicates that Private Companies hold 29%, 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - China Zhonghua Geotechnical Engineering Group has 2 warning signs we think you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com