Despite selling recently, Zhixin Group Holding Limited (HKG:2187) insiders own 61% stake and recent decline might have cost them

Key Insights

• Significant insider control over Zhixin Group Holding implies vested interests in company growth
• 53% of the business is held by the top 2 shareholders
• Recent sales by insiders

If you want to know who really controls Zhixin Group Holding Limited (HKG:2187), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 61% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Despite selling some shares recently, insiders control a good portion of the company's stock. As a result, they were also the group to endure the biggest losses as the stock fell by 15%.

Let's delve deeper into each type of owner of Zhixin Group Holding, beginning with the chart below.

View our latest analysis for Zhixin Group Holding

What Does The Institutional Ownership Tell Us About Zhixin Group Holding?

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.

Less than 5% of Zhixin Group Holding is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in Zhixin Group Holding. From our data, we infer that the largest shareholder is Zhijie Ye (who also holds the title of Top Key Executive) with 37% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. With 16% and 4.0% of the shares outstanding respectively, Wengui Huang and Yiyang Lai are the second and third largest shareholders. Interestingly, the second-largest shareholder, Wengui Huang is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

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 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 Zhixin Group Holding

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.

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 most recent data indicates that insiders own the majority of Zhixin Group Holding Limited. This means they can collectively make decisions for the company. Given it has a market cap of HK$800m, that means they have HK$492m worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 37% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zhixin Group Holding. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Zhixin Group Holding has 5 warning signs (and 3 which are concerning) we think 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.