Individual investors are Zhangjiagang Zhonghuan Hailu High-End Equipment Co., Ltd.'s (SZSE:301040) biggest owners and were hit after market cap dropped CN¥160m

Key Insights

• Zhangjiagang Zhonghuan Hailu High-End Equipment's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 25 shareholders own 49% of the company
• Insider ownership in Zhangjiagang Zhonghuan Hailu High-End Equipment is 30%

Every investor in Zhangjiagang Zhonghuan Hailu High-End Equipment Co., Ltd. (SZSE:301040) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 51% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of individual investors took a hit after last week’s 10% price drop, insiders with their 30% also suffered.

Let's take a closer look to see what the different types of shareholders can tell us about Zhangjiagang Zhonghuan Hailu High-End Equipment.

Check out our latest analysis for Zhangjiagang Zhonghuan Hailu High-End Equipment

What Does The Institutional Ownership Tell Us About Zhangjiagang Zhonghuan Hailu High-End Equipment?

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.

Zhangjiagang Zhonghuan Hailu High-End Equipment already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Zhangjiagang Zhonghuan Hailu High-End Equipment's historic earnings and revenue below, but keep in mind there's always more to the story.

Zhangjiagang Zhonghuan Hailu High-End Equipment is not owned by hedge funds. Junsan Wu is currently the largest shareholder, with 23% of shares outstanding. Jiangsu Jianghai Machinery Co. Ltd is the second largest shareholder owning 12% of common stock, and Jian Wu holds about 7.0% of the company stock. Jian Wu, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

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.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Zhangjiagang Zhonghuan Hailu High-End Equipment

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. 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.

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 Zhangjiagang Zhonghuan Hailu High-End Equipment Co., Ltd.. Insiders own CN¥435m worth of shares in the CN¥1.4b company. 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 substantial 51% stake in Zhangjiagang Zhonghuan Hailu High-End Equipment, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

We can see that Private Companies own 13%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Zhangjiagang Zhonghuan Hailu High-End Equipment better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Zhangjiagang Zhonghuan Hailu High-End Equipment (including 1 which makes us a bit uncomfortable) .

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.