Zhejiang Zhongjian Technology Co.,Ltd's (SZSE:002779) 15% gain last week benefited both private companies who own 34% as well as insiders

Key Insights

• The considerable ownership by private companies in Zhejiang Zhongjian TechnologyLtd indicates that they collectively have a greater say in management and business strategy
• 52% of the business is held by the top 4 shareholders
• Insiders own 32% of Zhejiang Zhongjian TechnologyLtd

To get a sense of who is truly in control of Zhejiang Zhongjian Technology Co.,Ltd (SZSE:002779), it is important to understand the ownership structure of the business. With 34% stake, private companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Private companies gained the most after market cap touched CN¥7.7b last week, while insiders who own 32% also benefitted.

Let's delve deeper into each type of owner of Zhejiang Zhongjian TechnologyLtd, beginning with the chart below.

View our latest analysis for Zhejiang Zhongjian TechnologyLtd

What Does The Institutional Ownership Tell Us About Zhejiang Zhongjian TechnologyLtd?

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 Zhejiang Zhongjian TechnologyLtd. 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. 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 Zhongjian 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 Zhongjian TechnologyLtd. Looking at our data, we can see that the largest shareholder is Zhongjian Electromechanical Group Co., Ltd. with 32% of shares outstanding. In comparison, the second and third largest shareholders hold about 11% and 5.0% of the stock. Minggen Wu, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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.

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 Zhejiang Zhongjian TechnologyLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 insiders own a significant proportion of Zhejiang Zhongjian Technology Co.,Ltd. It has a market capitalization of just CN¥7.7b, and insiders have CN¥2.5b worth of shares in their own names. That's quite significant. 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

With a 27% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zhejiang Zhongjian TechnologyLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 34%, of the shares on issue. 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 Zhejiang Zhongjian TechnologyLtd better, we need to consider many other factors. Take risks for example - Zhejiang Zhongjian TechnologyLtd has 1 warning sign we think you should be aware of.

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.