After the recent decline, Shenzhen Zhilai Sci and Tech Co., Ltd. (SZSE:300771) CEO Deyi Gan's holdings have lost 12% of their value

Key Insights

• Shenzhen Zhilai Sci and Tech's significant insider ownership suggests inherent interests in company's expansion
• 53% of the business is held by the top 4 shareholders
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Shenzhen Zhilai Sci and Tech Co., Ltd. (SZSE:300771) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 40% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As market cap fell to CN¥1.9b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Shenzhen Zhilai Sci and Tech.

View our latest analysis for Shenzhen Zhilai Sci and Tech

What Does The Institutional Ownership Tell Us About Shenzhen Zhilai Sci and Tech?

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.

As you can see, institutional investors have a fair amount of stake in Shenzhen Zhilai Sci and Tech. 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 Shenzhen Zhilai Sci and Tech's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Shenzhen Zhilai Sci and Tech. The company's CEO Deyi Gan is the largest shareholder with 24% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 19% and 6.1%, of the shares outstanding, respectively.

On looking further, we found that 53% of the shares are owned by the top 4 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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Shenzhen Zhilai Sci and Tech

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 insiders own a significant proportion of Shenzhen Zhilai Sci and Tech Co., Ltd.. Insiders own CN¥759m worth of shares in the CN¥1.9b 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 32% 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

Our data indicates that Private Companies hold 23%, of the company's shares. 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 Shenzhen Zhilai Sci and Tech better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 5 warning signs for Shenzhen Zhilai Sci and Tech (of which 2 are a bit unpleasant!) you should know about.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.