Private companies among Zhejiang XinNong Chemical Co.,Ltd.'s (SZSE:002942) largest stockholders and were hit after last week's 11% price drop

Key Insights

• Significant control over Zhejiang XinNong ChemicalLtd by private companies implies that the general public has more power to influence management and governance-related decisions
• 55% of the company is held by a single shareholder (Zhejiang Xinhui Investment Co., Ltd.)
• 17% of Zhejiang XinNong ChemicalLtd is held by insiders

A look at the shareholders of Zhejiang XinNong Chemical Co.,Ltd. (SZSE:002942) can tell us which group is most powerful. We can see that private companies own the lion's share in the company with 55% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 11% decline in share price, private companies suffered the most losses.

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

View our latest analysis for Zhejiang XinNong ChemicalLtd

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

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.

Less than 5% of Zhejiang XinNong ChemicalLtd is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. 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.

Zhejiang XinNong ChemicalLtd is not owned by hedge funds. Zhejiang Xinhui Investment Co., Ltd. is currently the largest shareholder, with 55% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Meanwhile, the second and third largest shareholders, hold 6.9% and 3.6%, of the shares outstanding, respectively. Note that the second and third-largest shareholders are also Chief Executive Officer and Member of the Board of Directors, respectively, meaning that the company's top shareholders are insiders.

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 Zhejiang XinNong ChemicalLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Zhejiang XinNong Chemical Co.,Ltd.. Insiders have a CN¥366m stake in this CN¥2.2b 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 25% stake in Zhejiang XinNong ChemicalLtd. 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 55%, of the Zhejiang XinNong ChemicalLtd stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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 3 warning signs we've spotted with Zhejiang XinNong ChemicalLtd (including 1 which can't be ignored) .

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.