Private companies account for 50% of Zhuzhou CRRC Times Electric Co., Ltd.'s (HKG:3898) ownership, while individual investors account for 25%

Key Insights

• The considerable ownership by private companies in Zhuzhou CRRC Times Electric indicates that they collectively have a greater say in management and business strategy
• 52% of the business is held by the top 2 shareholders
• Institutions own 24% of Zhuzhou CRRC Times Electric

Every investor in Zhuzhou CRRC Times Electric Co., Ltd. (HKG:3898) should be aware of the most powerful shareholder groups. With 50% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, individual investors make up 25% of the company’s shareholders.

In the chart below, we zoom in on the different ownership groups of Zhuzhou CRRC Times Electric.

Check out our latest analysis for Zhuzhou CRRC Times Electric

What Does The Institutional Ownership Tell Us About Zhuzhou CRRC Times Electric?

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.

Zhuzhou CRRC Times Electric 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 Zhuzhou CRRC Times Electric, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Zhuzhou CRRC Times Electric. Our data shows that CRRC GROUP Co., Ltd. is the largest shareholder with 47% of shares outstanding. JP Morgan Asset Management is the second largest shareholder owning 4.3% of common stock, and Vontobel Asset Management AG holds about 2.3% of the company stock.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Zhuzhou CRRC Times Electric

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.

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 most recent data indicates that insiders own less than 1% of Zhuzhou CRRC Times Electric Co., Ltd.. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Keep in mind that it's a big company, and the insiders own HK$44k worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zhuzhou CRRC Times Electric. 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 50%, of the Zhuzhou CRRC Times Electric 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:

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.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.