Private companies in Sichuan Jiuzhou Electronic Co., Ltd. (SZSE:000801) are its biggest bettors, and their bets paid off as stock gained 7.1% last week

Key Insights

• Sichuan Jiuzhou Electronic's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 4 investors have a majority stake in the company with 51% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Sichuan Jiuzhou Electronic Co., Ltd. (SZSE:000801), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 50% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, private companies benefitted the most after the company's market cap rose by CN¥951m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Sichuan Jiuzhou Electronic.

Check out our latest analysis for Sichuan Jiuzhou Electronic

What Does The Institutional Ownership Tell Us About Sichuan Jiuzhou Electronic?

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.

As you can see, institutional investors have a fair amount of stake in Sichuan Jiuzhou Electronic. 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. 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 Sichuan Jiuzhou Electronic, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Sichuan Jiuzhou Electronic. Sichuan Jiuzhou Investment Holding Group Co., Ltd. is currently the largest shareholder, with 48% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 1.2% and 1.2%, of the shares outstanding, respectively.

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 Sichuan Jiuzhou Electronic

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. 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.

We note our data does not show any board members holding shares, personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sichuan Jiuzhou Electronic. 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

It seems that Private Companies own 50%, of the Sichuan Jiuzhou Electronic stock. 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 Sichuan Jiuzhou Electronic better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Sichuan Jiuzhou Electronic (at least 1 which is potentially serious) , and understanding them should be part of your investment process.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.