Zhongshan Public Utilities Group Co.,Ltd's (SZSE:000685) largest shareholders are private companies with 51% ownership, individual investors own 35%

Key Insights

• The considerable ownership by private companies in Zhongshan Public Utilities GroupLtd indicates that they collectively have a greater say in management and business strategy
• 57% of the business is held by the top 2 shareholders
• Institutions own 13% of Zhongshan Public Utilities GroupLtd

Every investor in Zhongshan Public Utilities Group Co.,Ltd (SZSE:000685) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 51% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Meanwhile, individual investors make up 35% of the company’s shareholders.

Let's take a closer look to see what the different types of shareholders can tell us about Zhongshan Public Utilities GroupLtd.

See our latest analysis for Zhongshan Public Utilities GroupLtd

What Does The Institutional Ownership Tell Us About Zhongshan Public Utilities GroupLtd?

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.

We can see that Zhongshan Public Utilities GroupLtd 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. 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 Zhongshan Public Utilities GroupLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Zhongshan Public Utilities GroupLtd is not owned by hedge funds. Zhongshan Investment Holding Group Co., Ltd. is currently the company's largest shareholder with 49% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.1% and 1.8%, 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. 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 Zhongshan Public Utilities GroupLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 data suggests that insiders own under 1% of Zhongshan Public Utilities Group Co.,Ltd in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. Keep in mind that it's a big company, and the insiders own CN¥112m worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 35% stake in Zhongshan Public Utilities GroupLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 51%, of the Zhongshan Public Utilities GroupLtd stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. For example, we've discovered 2 warning signs for Zhongshan Public Utilities GroupLtd (1 shouldn't be ignored!) that you should be aware of before investing here.

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.