CEO Yunming Xu, Zhejiang Lante Optics Co., Ltd.'s (SHSE:688127) largest shareholder sees value of holdings go down 6.9% after recent drop

Key Insights

• Insiders appear to have a vested interest in Zhejiang Lante Optics' growth, as seen by their sizeable ownership
• 51% of the business is held by the top 2 shareholders
• Institutional ownership in Zhejiang Lante Optics is 11%

A look at the shareholders of Zhejiang Lante Optics Co., Ltd. (SHSE:688127) can tell us which group is most powerful. With 56% stake, individual insiders 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.

And last week, insiders endured the biggest losses as the stock fell by 6.9%.

Let's take a closer look to see what the different types of shareholders can tell us about Zhejiang Lante Optics.

See our latest analysis for Zhejiang Lante Optics

What Does The Institutional Ownership Tell Us About Zhejiang Lante Optics?

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.

We can see that Zhejiang Lante Optics does have institutional investors; and they hold a good portion of the company's stock. 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 Zhejiang Lante Optics' historic earnings and revenue below, but keep in mind there's always more to the story.

Zhejiang Lante Optics is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Yunming Xu with 38% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 14% and 2.1%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Zhejiang Lante Optics

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 that insiders own more than half the Zhejiang Lante Optics Co., Ltd. stock. This gives them a lot of power. So they have a CN¥3.8b stake in this CN¥6.7b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zhejiang Lante Optics. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Zhejiang Lante Optics (of which 1 is significant!) you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.