Zhe Jiang Li Zi Yuan Food Co.,Ltd.'s (SHSE:605337) last week's 8.6% decline must have disappointed private companies who have a significant stake

Key Insights

• The considerable ownership by private companies in Zhe Jiang Li Zi Yuan FoodLtd indicates that they collectively have a greater say in management and business strategy
• A total of 2 investors have a majority stake in the company with 55% ownership
• Insiders own 31% of Zhe Jiang Li Zi Yuan FoodLtd

A look at the shareholders of Zhe Jiang Li Zi Yuan Food Co.,Ltd. (SHSE:605337) can tell us which group is most powerful. With 35% 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).

While insiders, who own 31% shares weren’t spared from last week’s CN¥395m market cap drop, private companies as a group suffered the maximum losses

Let's delve deeper into each type of owner of Zhe Jiang Li Zi Yuan FoodLtd, beginning with the chart below.

Check out our latest analysis for Zhe Jiang Li Zi Yuan FoodLtd

What Does The Institutional Ownership Tell Us About Zhe Jiang Li Zi Yuan FoodLtd?

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.

Zhe Jiang Li Zi Yuan FoodLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Zhe Jiang Li Zi Yuan FoodLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Zhe Jiang Li Zi Yuan FoodLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Zhejiang Lishui Shuidiquan Investment Development Co., Ltd. with 33% of shares outstanding. For context, the second largest shareholder holds about 22% of the shares outstanding, followed by an ownership of 6.5% by the third-largest shareholder. Xubin Wang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 55% stake.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Zhe Jiang Li Zi Yuan FoodLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

Our information suggests that insiders maintain a significant holding in Zhe Jiang Li Zi Yuan Food Co.,Ltd.. Insiders have a CN¥1.3b stake in this CN¥4.2b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 23% 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

We can see that Private Companies own 35%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Zhe Jiang Li Zi Yuan FoodLtd you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.