Private companies are Ningbo ZhongDa Leader Intelligent Transmission Co., Ltd.'s (SZSE:002896) biggest owners and were rewarded after market cap rose by CN¥656m last week

Key Insights

• The considerable ownership by private companies in Ningbo ZhongDa Leader Intelligent Transmission indicates that they collectively have a greater say in management and business strategy
• The top 3 shareholders own 51% of the company
• 14% of Ningbo ZhongDa Leader Intelligent Transmission is held by Institutions

A look at the shareholders of Ningbo ZhongDa Leader Intelligent Transmission Co., Ltd. (SZSE:002896) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies were the biggest beneficiaries of last week’s 13% gain.

Let's delve deeper into each type of owner of Ningbo ZhongDa Leader Intelligent Transmission, beginning with the chart below.

Check out our latest analysis for Ningbo ZhongDa Leader Intelligent Transmission

What Does The Institutional Ownership Tell Us About Ningbo ZhongDa Leader Intelligent Transmission?

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.

Ningbo ZhongDa Leader Intelligent Transmission 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. 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 Ningbo ZhongDa Leader Intelligent Transmission's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Ningbo ZhongDa Leader Intelligent Transmission. Looking at our data, we can see that the largest shareholder is Ningbo Zhongda Leader Investment Co., Ltd. with 45% of shares outstanding. In comparison, the second and third largest shareholders hold about 2.8% and 2.6% of the stock.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.

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. 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 Ningbo ZhongDa Leader Intelligent Transmission

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

We note our data does not show any board members holding shares, personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

The general public, who are usually individual investors, hold a 40% stake in Ningbo ZhongDa Leader Intelligent Transmission. 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

Our data indicates that Private Companies hold 46%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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 - Ningbo ZhongDa Leader Intelligent Transmission has 1 warning sign we think 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.