After the recent decline, Zhe Kuang Heavy Industry Co.,Ltd. (SZSE:300837) CEO Lihua Chen's holdings have lost 17% of their value

Key Insights

• Zhe Kuang Heavy IndustryLtd's significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 53% ownership
• 16% of Zhe Kuang Heavy IndustryLtd is held by Institutions

To get a sense of who is truly in control of Zhe Kuang Heavy Industry Co.,Ltd. (SZSE:300837), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 59% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, insiders endured the biggest losses as the stock fell by 17%.

Let's delve deeper into each type of owner of Zhe Kuang Heavy IndustryLtd, beginning with the chart below.

View our latest analysis for Zhe Kuang Heavy IndustryLtd

What Does The Institutional Ownership Tell Us About Zhe Kuang Heavy IndustryLtd?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Zhe Kuang Heavy IndustryLtd. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Zhe Kuang Heavy IndustryLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Zhe Kuang Heavy IndustryLtd is not owned by hedge funds. With a 46% stake, CEO Lihua Chen is the largest shareholder. With 7.5% and 6.7% of the shares outstanding respectively, Huzhou Jundu Investment Management Co., Ltd. and Lianfang Chen are the second and third largest shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Zhe Kuang Heavy IndustryLtd

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.

It seems that insiders own more than half the Zhe Kuang Heavy Industry Co.,Ltd. stock. This gives them a lot of power. So they have a CN¥1.2b stake in this CN¥2.0b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 17% stake in Zhe Kuang Heavy IndustryLtd. 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 7.5%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Zhe Kuang Heavy IndustryLtd better, we need to consider many other factors. To that end, you should be aware of the 3 warning signs we've spotted with Zhe Kuang Heavy IndustryLtd .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.