Zhejiang Weiming Environment Protection Co., Ltd.'s (SHSE:603568) market cap dropped CN¥1.5b last week; Private companies bore the brunt

Key Insights

• Significant control over Zhejiang Weiming Environment Protection by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 58% of the company
• Insider ownership in Zhejiang Weiming Environment Protection is 24%

If you want to know who really controls Zhejiang Weiming Environment Protection Co., Ltd. (SHSE:603568), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 48% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders who own 24% came under pressure after market cap dropped to CN¥36b last week,private companies took the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Zhejiang Weiming Environment Protection.

View our latest analysis for Zhejiang Weiming Environment Protection

What Does The Institutional Ownership Tell Us About Zhejiang Weiming Environment Protection?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Zhejiang Weiming Environment Protection does have institutional investors; and they hold a good portion of the company's stock. 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 Weiming Environment Protection's earnings history below. Of course, the future is what really matters.

Zhejiang Weiming Environment Protection is not owned by hedge funds. Weiming Group Co., Ltd. is currently the company's largest shareholder with 48% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 3.2%, of the shares outstanding, respectively. Guang Ming Xiang, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Zhejiang Weiming Environment Protection

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.

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.

Our information suggests that insiders maintain a significant holding in Zhejiang Weiming Environment Protection Co., Ltd.. Insiders own CN¥8.6b worth of shares in the CN¥36b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. 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 20% stake in Zhejiang Weiming Environment Protection. 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 48%, of the Zhejiang Weiming Environment Protection stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Zhejiang Weiming Environment Protection , and understanding them should be part of your investment process.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.