Private companies are Zhejiang FORE Intelligent Technology Co.,Ltd's (SZSE:301368) biggest owners and were hit after market cap dropped CN¥377m

Key Insights

• Significant control over Zhejiang FORE Intelligent TechnologyLtd by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 5 shareholders own 53% of the company
• Institutional ownership in Zhejiang FORE Intelligent TechnologyLtd is 15%

Every investor in Zhejiang FORE Intelligent Technology Co.,Ltd (SZSE:301368) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies as a group endured the highest losses last week after market cap fell by CN¥377m.

In the chart below, we zoom in on the different ownership groups of Zhejiang FORE Intelligent TechnologyLtd.

View our latest analysis for Zhejiang FORE Intelligent TechnologyLtd

What Does The Institutional Ownership Tell Us About Zhejiang FORE Intelligent TechnologyLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Zhejiang FORE Intelligent TechnologyLtd. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Zhejiang FORE Intelligent TechnologyLtd, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Zhejiang FORE Intelligent TechnologyLtd. Taizhou Huangyan Fore Electric Control Equipment Co., Ltd. is currently the company's largest shareholder with 37% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.0% and 4.1% of the stock. Furthermore, CEO Youli Wang is the owner of 1.7% of the company's shares.

Our research also brought to light the fact that roughly 53% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. 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 FORE Intelligent TechnologyLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 some shares in Zhejiang FORE Intelligent Technology Co.,Ltd. As individuals, the insiders collectively own CN¥197m worth of the CN¥5.1b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 30% stake in the company, and hence can't easily be ignored. 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

Our data indicates that Private Companies hold 52%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Zhejiang FORE Intelligent TechnologyLtd better, we need to consider many other factors. For instance, we've identified 4 warning signs for Zhejiang FORE Intelligent TechnologyLtd (3 are a bit unpleasant) that you should be aware of.

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.

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