Zall Smart Commerce Group Ltd.'s (HKG:2098) most bullish insider is CEO Zhi Yan, and their holdings value went up by 8.8% last week

Key Insights

• Insiders appear to have a vested interest in Zall Smart Commerce Group's growth, as seen by their sizeable ownership
• 70% of the company is held by a single shareholder (Zhi Yan)
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Zall Smart Commerce Group Ltd. (HKG:2098), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 71% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by HK$434m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Zall Smart Commerce Group.

View our latest analysis for Zall Smart Commerce Group

What Does The Institutional Ownership Tell Us About Zall Smart Commerce Group?

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 Zall Smart Commerce Group 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 Zall Smart Commerce Group's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Zall Smart Commerce Group. Looking at our data, we can see that the largest shareholder is the CEO Zhi Yan with 70% of shares outstanding. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. China Huarong Asset Management Co., Ltd., Asset Management Arm is the second largest shareholder owning 5.5% of common stock, and Gang Yu holds about 0.8% of the company stock. Interestingly, the third-largest shareholder, Gang Yu is also a Co-Chairman of the Board, again, indicating strong insider ownership amongst the company's top shareholders.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Zall Smart Commerce Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our information suggests that insiders own more than half of Zall Smart Commerce Group Ltd.. This gives them effective control of the company. So they have a HK$3.8b stake in this HK$5.4b 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

The general public-- including retail investors -- own 23% stake in the company, and hence can't easily be ignored. 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.

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. To that end, you should learn about the 4 warning signs we've spotted with Zall Smart Commerce Group (including 2 which are significant) .

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com