Zhejiang Yonghe Refrigerant Co., Ltd.'s (SHSE:605020) largest shareholder, CEO Jianguo Tong sees holdings value fall by 9.9% following recent drop

Key Insights

• Insiders appear to have a vested interest in Zhejiang Yonghe Refrigerant's growth, as seen by their sizeable ownership
• A total of 2 investors have a majority stake in the company with 54% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of Zhejiang Yonghe Refrigerant Co., Ltd. (SHSE:605020) can tell us which group is most powerful. With 51% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, insiders endured the biggest losses as the stock fell by 9.9%.

In the chart below, we zoom in on the different ownership groups of Zhejiang Yonghe Refrigerant.

See our latest analysis for Zhejiang Yonghe Refrigerant

What Does The Institutional Ownership Tell Us About Zhejiang Yonghe Refrigerant?

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 Zhejiang Yonghe Refrigerant does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Zhejiang Yonghe Refrigerant's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Zhejiang Yonghe Refrigerant. The company's CEO Jianguo Tong is the largest shareholder with 47% of shares outstanding. With 7.3% and 5.5% of the shares outstanding respectively, Ningbo Meishan Bonded Port Area Binglong Investment Partnership Enterprise (LP) and Zhejiang Xinghao Investment Co., Ltd. are the second and third largest shareholders.

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 54% 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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Zhejiang Yonghe Refrigerant

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

It seems that insiders own more than half the Zhejiang Yonghe Refrigerant Co., Ltd. stock. This gives them a lot of power. Given it has a market cap of CN¥6.4b, that means they have CN¥3.3b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zhejiang Yonghe Refrigerant. 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

It seems that Private Companies own 18%, of the Zhejiang Yonghe Refrigerant 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. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Zhejiang Yonghe Refrigerant (at least 1 which is concerning) , and understanding them should be part of your investment process.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.