Yunnan Chihong Zinc & Germanium Co., Ltd.'s (SHSE:600497) market cap surged CN¥1.8b last week, individual investors who have a lot riding on the company were rewarded

Key Insights

• Yunnan Chihong Zinc & Germanium's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 50% of the business is held by the top 11 shareholders
• Institutional ownership in Yunnan Chihong Zinc & Germanium is 12%

To get a sense of who is truly in control of Yunnan Chihong Zinc & Germanium Co., Ltd. (SHSE:600497), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 46% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, individual investors were the biggest beneficiaries of last week’s 5.8% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Yunnan Chihong Zinc & Germanium.

Check out our latest analysis for Yunnan Chihong Zinc & Germanium

What Does The Institutional Ownership Tell Us About Yunnan Chihong Zinc & Germanium?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Yunnan Chihong Zinc & Germanium 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 Yunnan Chihong Zinc & Germanium's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Yunnan Chihong Zinc & Germanium. Aluminum Corporation of China is currently the largest shareholder, with 39% of shares outstanding. For context, the second largest shareholder holds about 4.0% of the shares outstanding, followed by an ownership of 2.5% by the third-largest shareholder.

After doing some more digging, we found that the top 11 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Yunnan Chihong Zinc & Germanium

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. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can see that insiders own shares in Yunnan Chihong Zinc & Germanium Co., Ltd.. The insiders have a meaningful stake worth CN¥934m. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 46% 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

Our data indicates that Private Companies hold 40%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for Yunnan Chihong Zinc & Germanium that 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.