Private companies are Shenzhen Cheng Chung Design Co., Ltd.'s (SZSE:002811) biggest owners and were rewarded after market cap rose by CN¥375m last week

Key Insights

• Shenzhen Cheng Chung Design's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• Shenzhen Yatai Yizhao Investment Co., Ltd. owns 53% of the company
• Insider ownership in Shenzhen Cheng Chung Design is 18%

If you want to know who really controls Shenzhen Cheng Chung Design Co., Ltd. (SZSE:002811), then you'll have to look at the makeup of its share registry. With 53% stake, private companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private companies were the biggest beneficiaries of last week’s 14% gain.

In the chart below, we zoom in on the different ownership groups of Shenzhen Cheng Chung Design.

Check out our latest analysis for Shenzhen Cheng Chung Design

What Does The Institutional Ownership Tell Us About Shenzhen Cheng Chung Design?

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.

Since institutions own only a small portion of Shenzhen Cheng Chung Design, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

We note that hedge funds don't have a meaningful investment in Shenzhen Cheng Chung Design. Shenzhen Yatai Yizhao Investment Co., Ltd. is currently the largest shareholder, with 53% of shares outstanding. This implies that they have majority interest control of the future of the company. Zhong Zheng is the second largest shareholder owning 12% of common stock, and Lin Lin holds about 2.6% of the company stock.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Shenzhen Cheng Chung Design

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Shenzhen Cheng Chung Design Co., Ltd.. Insiders have a CN¥550m stake in this CN¥3.1b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 24% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 53%, 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:

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. For instance, we've identified 4 warning signs for Shenzhen Cheng Chung Design (1 is significant) that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.