Retail investors invested in Qingdao Zhongzi Zhongcheng Group Co.,Ltd. (SZSE:300208) copped the brunt of last week's CN¥165m market cap decline

Key Insights

• The considerable ownership by retail investors in Qingdao Zhongzi Zhongcheng GroupLtd indicates that they collectively have a greater say in management and business strategy
• The top 4 shareholders own 52% of the company
• Insider ownership in Qingdao Zhongzi Zhongcheng GroupLtd is 26%

A look at the shareholders of Qingdao Zhongzi Zhongcheng Group Co.,Ltd. (SZSE:300208) can tell us which group is most powerful. With 43% stake, retail 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.

And following last week's 15% decline in share price, retail investors suffered the most losses.

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

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

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. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. 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.

Hedge funds don't have many shares in Qingdao Zhongzi Zhongcheng GroupLtd. The company's largest shareholder is Qingdao City Construction Investment (Group) Co.,Ltd, with ownership of 22%. 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.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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 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.

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 Qingdao Zhongzi Zhongcheng Group Co.,Ltd.. Insiders have a CN¥239m stake in this CN¥922m 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 size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 31%, of the Qingdao Zhongzi Zhongcheng GroupLtd 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 4 warning signs for Qingdao Zhongzi Zhongcheng GroupLtd you should know about.

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.

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

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