Individual investors invested in Qingdao Zhongzi Zhongcheng Group Co.,Ltd. (SZSE:300208) copped the brunt of last week's CN¥540m market cap decline

Key Insights

• Significant control over Qingdao Zhongzi Zhongcheng GroupLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 4 investors have a majority stake in the company with 52% ownership
• Insiders own 26% of Qingdao Zhongzi Zhongcheng GroupLtd

To get a sense of who is truly in control of Qingdao Zhongzi Zhongcheng Group Co.,Ltd. (SZSE:300208), it is important to understand the ownership structure of the business. With 43% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to CN¥1.8b last week, individual investors would have faced the highest losses than any other shareholder groups of the company.

Let's take a closer look to see what the different types of shareholders can tell us about Qingdao Zhongzi Zhongcheng GroupLtd.

Check out our latest analysis for Qingdao Zhongzi Zhongcheng GroupLtd

What Does The Lack Of Institutional Ownership Tell Us About Qingdao Zhongzi Zhongcheng GroupLtd?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Qingdao Zhongzi Zhongcheng GroupLtd'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.

Qingdao Zhongzi Zhongcheng GroupLtd is not owned by hedge funds. Our data shows that Qingdao City Construction Investment (Group) Co.,Ltd is the largest shareholder with 22% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 10%, of the shares outstanding, respectively. Xiao Yu Jia, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Qingdao Zhongzi Zhongcheng GroupLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our most recent data indicates that insiders own a reasonable proportion of Qingdao Zhongzi Zhongcheng Group Co.,Ltd.. Insiders have a CN¥474m stake in this CN¥1.8b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 43% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Qingdao Zhongzi Zhongcheng GroupLtd. 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

We can see that Private Companies own 31%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Qingdao Zhongzi Zhongcheng GroupLtd better, we need to consider many other factors. Take risks for example - Qingdao Zhongzi Zhongcheng GroupLtd has 4 warning signs we think you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.