Retail investors among Zhongxing Shenyang Commercial Building Group Co.,Ltd's (SZSE:000715) largest stockholders and were hit after last week's 10% price drop

Key Insights

• Significant control over Zhongxing Shenyang Commercial Building GroupLtd by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 5 shareholders own 52% of the company
• Insiders own 24% of Zhongxing Shenyang Commercial Building GroupLtd

If you want to know who really controls Zhongxing Shenyang Commercial Building Group Co.,Ltd (SZSE:000715), then you'll have to look at the makeup of its share registry. With 40% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to CN¥2.0b last week, retail investors would have faced the highest losses than any other shareholder groups of the company.

Let's take a closer look to see what the different types of shareholders can tell us about Zhongxing Shenyang Commercial Building GroupLtd.

See our latest analysis for Zhongxing Shenyang Commercial Building GroupLtd

What Does The Lack Of Institutional Ownership Tell Us About Zhongxing Shenyang Commercial Building GroupLtd?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Zhongxing Shenyang Commercial Building GroupLtd might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Hedge funds don't have many shares in Zhongxing Shenyang Commercial Building GroupLtd. Our data shows that Beijing Fangda International Industrial Investment Co., Ltd. is the largest shareholder with 15% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 13% and 10.0%, of the shares outstanding, respectively.

On looking further, we found that 52% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Zhongxing Shenyang Commercial Building GroupLtd

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 information suggests that insiders maintain a significant holding in Zhongxing Shenyang Commercial Building Group Co.,Ltd. Insiders own CN¥482m worth of shares in the CN¥2.0b 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-- including retail investors -- own 40% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 31%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Zhongxing Shenyang Commercial Building GroupLtd (at least 1 which doesn't sit too well with us) , and understanding them should be part of your investment process.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.