CEO Rongwei Lou, Hangzhou Jizhi Mechatronic Co., Ltd.'s (SZSE:300553) largest shareholder sees value of holdings go down 13% after recent drop

Key Insights

• Hangzhou Jizhi Mechatronic's significant insider ownership suggests inherent interests in company's expansion
• The top 7 shareholders own 51% of the company
• Institutional ownership in Hangzhou Jizhi Mechatronic is 11%

A look at the shareholders of Hangzhou Jizhi Mechatronic Co., Ltd. (SZSE:300553) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 50% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders as a group endured the highest losses after market cap fell by CN¥271m.

Let's take a closer look to see what the different types of shareholders can tell us about Hangzhou Jizhi Mechatronic.

Check out our latest analysis for Hangzhou Jizhi Mechatronic

What Does The Institutional Ownership Tell Us About Hangzhou Jizhi Mechatronic?

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.

Hangzhou Jizhi Mechatronic already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Hangzhou Jizhi Mechatronic, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Hangzhou Jizhi Mechatronic. Looking at our data, we can see that the largest shareholder is the CEO Rongwei Lou with 24% of shares outstanding. For context, the second largest shareholder holds about 5.6% of the shares outstanding, followed by an ownership of 5.0% by the third-largest shareholder.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. 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 Hangzhou Jizhi Mechatronic

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our information suggests that insiders maintain a significant holding in Hangzhou Jizhi Mechatronic Co., Ltd.. Insiders own CN¥914m worth of shares in the CN¥1.8b company. 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, who are usually individual investors, hold a 33% stake in Hangzhou Jizhi Mechatronic. 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 6.7%, of the Hangzhou Jizhi Mechatronic stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Hangzhou Jizhi Mechatronic better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Hangzhou Jizhi Mechatronic you should know about.

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.