Zhangjiagang Zhonghuan Hailu High-End Equipment Co., Ltd.'s (SZSE:301040) market cap up CN¥204m last week, benefiting both individual investors who own 50% as well as insiders

Key Insights

• The considerable ownership by individual investors in Zhangjiagang Zhonghuan Hailu High-End Equipment 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 50% ownership
• 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. We can see that individual investors own the lion's share in the company with 50% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While individual investors were the group that reaped the most benefits after last week’s 23% price gain, insiders also received a 30% cut.

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

See 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.

We can see that Zhangjiagang Zhonghuan Hailu High-End Equipment 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Zhangjiagang Zhonghuan Hailu High-End Equipment's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Zhangjiagang Zhonghuan Hailu High-End Equipment. The company's largest shareholder is Junsan Wu, with ownership of 23%. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 7.0% by the third-largest shareholder. Jian Wu, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 Zhangjiagang Zhonghuan Hailu High-End Equipment

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own a reasonable proportion of Zhangjiagang Zhonghuan Hailu High-End Equipment Co., Ltd.. Insiders have a CN¥314m stake in this CN¥1.0b business. 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 50% of Zhangjiagang Zhonghuan Hailu High-End Equipment. 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:

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 be aware of the 1 warning sign we've spotted with Zhangjiagang Zhonghuan Hailu High-End Equipment .

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.

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

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