Zhejiang Wanfeng Chemical Co.,Ltd.'s (SHSE:603172) largest shareholders are private companies who were rewarded as market cap surged CN¥216m last week

Key Insights

• Significant control over Zhejiang Wanfeng ChemicalLtd by private companies implies that the general public has more power to influence management and governance-related decisions
• 55% of the business is held by the top 2 shareholders
• Insiders own 16% of Zhejiang Wanfeng ChemicalLtd

If you want to know who really controls Zhejiang Wanfeng Chemical Co.,Ltd. (SHSE:603172), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 59% 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, private companies collectively scored the highest last week as the company hit CN¥2.1b market cap following a 12% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Zhejiang Wanfeng ChemicalLtd.

See our latest analysis for Zhejiang Wanfeng ChemicalLtd

What Does The Institutional Ownership Tell Us About Zhejiang Wanfeng ChemicalLtd?

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.

Institutions have a very small stake in Zhejiang Wanfeng ChemicalLtd. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Zhejiang Wanfeng ChemicalLtd is not owned by hedge funds. The company's largest shareholder is Ningbo Yufeng Investment Management Co., Ltd., with ownership of 44%. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 7.5% by the third-largest shareholder. Xingying Yu, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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.

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. 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 Zhejiang Wanfeng ChemicalLtd

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.

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.

Our information suggests that insiders maintain a significant holding in Zhejiang Wanfeng Chemical Co.,Ltd.. It has a market capitalization of just CN¥2.1b, and insiders have CN¥338m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 22% stake in the company, and hence can't easily be ignored. 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

It seems that Private Companies own 59%, of the Zhejiang Wanfeng ChemicalLtd 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. To that end, you should learn about the 4 warning signs we've spotted with Zhejiang Wanfeng ChemicalLtd (including 1 which is a bit concerning) .

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.