Shanghai Zhangjiang Hi-Tech Park Development Co., Ltd.'s (SHSE:600895) market cap surged CN¥1.3b last week, private companies who have a lot riding on the company were rewarded

Key Insights

• Significant control over Shanghai Zhangjiang Hi-Tech Park Development by private companies implies that the general public has more power to influence management and governance-related decisions
• The largest shareholder of the company is Shanghai Zhang Jiang (Group) Co., Ltd. with a 51% stake
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Shanghai Zhangjiang Hi-Tech Park Development Co., Ltd. (SHSE:600895) 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 private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, private companies benefitted the most after the company's market cap rose by CN¥1.3b last week.

In the chart below, we zoom in on the different ownership groups of Shanghai Zhangjiang Hi-Tech Park Development.

See our latest analysis for Shanghai Zhangjiang Hi-Tech Park Development

What Does The Institutional Ownership Tell Us About Shanghai Zhangjiang Hi-Tech Park Development?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Shanghai Zhangjiang Hi-Tech Park Development already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Shanghai Zhangjiang Hi-Tech Park Development'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 Shanghai Zhangjiang Hi-Tech Park Development. The company's largest shareholder is Shanghai Zhang Jiang (Group) Co., Ltd., with ownership of 51%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. In comparison, the second and third largest shareholders hold about 2.6% and 1.1% of the stock.

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 Shanghai Zhangjiang Hi-Tech Park Development

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 data suggests that insiders own under 1% of Shanghai Zhangjiang Hi-Tech Park Development Co., Ltd. in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around CN¥72m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 42% stake in Shanghai Zhangjiang Hi-Tech Park Development. 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 51%, of the Shanghai Zhangjiang Hi-Tech Park Development 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Shanghai Zhangjiang Hi-Tech Park Development better, we need to consider many other factors. For example, we've discovered 3 warning signs for Shanghai Zhangjiang Hi-Tech Park Development (1 shouldn't be ignored!) that you should be aware of before investing here.

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.

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.