Lanzhou Zhuangyuan Pasture Co., Ltd.'s (SZSE:002910) market cap dropped CN¥203m last week; Retail investors bore the brunt

Key Insights

• The considerable ownership by retail investors in Lanzhou Zhuangyuan Pasture indicates that they collectively have a greater say in management and business strategy
• The top 3 shareholders own 54% of the company
• Insider ownership in Lanzhou Zhuangyuan Pasture is 17%

If you want to know who really controls Lanzhou Zhuangyuan Pasture Co., Ltd. (SZSE:002910), 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 retail investors with 42% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 15% decline in share price, retail investors suffered the most losses.

Let's delve deeper into each type of owner of Lanzhou Zhuangyuan Pasture, beginning with the chart below.

See our latest analysis for Lanzhou Zhuangyuan Pasture

What Does The Institutional Ownership Tell Us About Lanzhou Zhuangyuan Pasture?

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.

Since institutions own only a small portion of Lanzhou Zhuangyuan Pasture, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Hedge funds don't have many shares in Lanzhou Zhuangyuan Pasture. Gansu Provincial Land Reclamation Asset Management Limited is currently the largest shareholder, with 19% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 18% and 16%, of the shares outstanding, respectively. Hongfu Ma, who is the third-largest shareholder, also happens to hold the title of Vice Chairman.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 Lanzhou Zhuangyuan Pasture

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own a reasonable proportion of Lanzhou Zhuangyuan Pasture Co., Ltd.. Insiders have a CN¥198m stake in this CN¥1.2b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 42% stake in Lanzhou Zhuangyuan Pasture. 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

We can see that Private Companies own 37%, of the shares on issue. 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 Lanzhou Zhuangyuan Pasture better, we need to consider many other factors. Take risks for example - Lanzhou Zhuangyuan Pasture has 2 warning signs we think you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.