Henan Zhongfu Industrial Co.,Ltd's (SHSE:600595) biggest owners are individual investors who got richer after stock soared 15% last week

Key Insights

• The considerable ownership by individual investors in Henan Zhongfu IndustrialLtd indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 44% ownership
• 13% of Henan Zhongfu IndustrialLtd is held by Institutions

A look at the shareholders of Henan Zhongfu Industrial Co.,Ltd (SHSE:600595) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 56% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, individual investors benefitted the most after the company's market cap rose by CN¥1.5b last week.

Let's delve deeper into each type of owner of Henan Zhongfu IndustrialLtd, beginning with the chart below.

Check out our latest analysis for Henan Zhongfu IndustrialLtd

What Does The Institutional Ownership Tell Us About Henan Zhongfu IndustrialLtd?

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.

We can see that Henan Zhongfu IndustrialLtd 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Henan Zhongfu IndustrialLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Henan Zhongfu IndustrialLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Maxon Limited with 20% of shares outstanding. With 6.7% and 4.6% of the shares outstanding respectively, Henan Yicheng Venture Capital Group Co., Ltd. and Shenzhen Putai Investment Development Co., Ltd. are the second and third largest shareholders.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Henan Zhongfu IndustrialLtd

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.

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 can report that insiders do own shares in Henan Zhongfu Industrial Co.,Ltd. This is a big company, so it is good to see this level of alignment. Insiders own CN¥135m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public -- including retail investors -- own 56% of Henan Zhongfu IndustrialLtd. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Equity Ownership

With a stake of 6.7%, private equity firms could influence the Henan Zhongfu IndustrialLtd board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

It seems that Private Companies own 23%, of the Henan Zhongfu IndustrialLtd stock. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com