Shenzhen Zhilai Sci and Tech Co., Ltd.'s (SZSE:300771) 19% gain last week benefited both retail investors who own 53% as well as insiders

Key Insights

• Shenzhen Zhilai Sci and Tech's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 25 shareholders own 47% of the company
• 40% of Shenzhen Zhilai Sci and Tech is held by insiders

To get a sense of who is truly in control of Shenzhen Zhilai Sci and Tech Co., Ltd. (SZSE:300771), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 53% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While retail investors were the group that reaped the most benefits after last week’s 19% price gain, insiders also received a 40% cut.

Let's delve deeper into each type of owner of Shenzhen Zhilai Sci and Tech, beginning with the chart below.

See our latest analysis for Shenzhen Zhilai Sci and Tech

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

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Shenzhen Zhilai Sci and Tech does have institutional investors; and they hold a good portion of the company's stock. 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. 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. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Shenzhen Zhilai Sci and Tech's case, its Chairman of Management Board, Deyi Gan, is the largest shareholder, holding 24% of shares outstanding. With 6.2% and 4.7% of the shares outstanding respectively, Mingli Yi and Xingping Wang are the second and third largest shareholders. Interestingly, the third-largest shareholder, Xingping Wang is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Shenzhen Zhilai Sci and Tech

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. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own a reasonable proportion of Shenzhen Zhilai Sci and Tech Co., Ltd.. It has a market capitalization of just CN¥2.5b, and insiders have CN¥996m worth of shares in their own names. 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 -- including retail investors -- own 53% of Shenzhen Zhilai Sci and Tech. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Shenzhen Zhilai Sci and Tech (of which 1 is a bit concerning!) you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.