Zhejiang Linuo Flow Control Technology Co.,Ltd (SZSE:300838) CEO Xiaoyu Chen, the company's largest shareholder sees 10% reduction in holdings value

Key Insights

• Insiders appear to have a vested interest in Zhejiang Linuo Flow Control TechnologyLtd's growth, as seen by their sizeable ownership
• 52% of the business is held by the top 5 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Zhejiang Linuo Flow Control Technology Co.,Ltd (SZSE:300838), then you'll have to look at the makeup of its share registry. With 57% stake, individual insiders 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 10% decline in share price, insiders suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Zhejiang Linuo Flow Control TechnologyLtd.

Check out our latest analysis for Zhejiang Linuo Flow Control TechnologyLtd

What Does The Institutional Ownership Tell Us About Zhejiang Linuo Flow Control TechnologyLtd?

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.

Zhejiang Linuo Flow Control TechnologyLtd 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Zhejiang Linuo Flow Control TechnologyLtd's earnings history below. Of course, the future is what really matters.

Zhejiang Linuo Flow Control TechnologyLtd is not owned by hedge funds. The company's CEO Xiaoyu Chen is the largest shareholder with 21% of shares outstanding. With 8.9% and 7.9% of the shares outstanding respectively, Xiang Ren and Xiuguo Wang are the second and third largest shareholders. Interestingly, the third-largest shareholder, Xiuguo Wang is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Zhejiang Linuo Flow Control TechnologyLtd

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.

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.

It seems that insiders own more than half the Zhejiang Linuo Flow Control Technology Co.,Ltd stock. This gives them a lot of power. So they have a CN¥980m stake in this CN¥1.7b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 34% stake in Zhejiang Linuo Flow Control TechnologyLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Zhejiang Linuo Flow Control TechnologyLtd better, we need to consider many other factors. For example, we've discovered 1 warning sign for Zhejiang Linuo Flow Control TechnologyLtd that you should be aware of before investing here.

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.