Institutions profited after Zhuguang Holdings Group Company Limited's (HKG:1176) market cap rose HK$267m last week but private companies profited the most

Key Insights

• Significant control over Zhuguang Holdings Group by private companies implies that the general public has more power to influence management and governance-related decisions
• Rong De Investments Limited owns 58% of the company
• Institutions own 24% of Zhuguang Holdings Group

If you want to know who really controls Zhuguang Holdings Group Company Limited (HKG:1176), then you'll have to look at the makeup of its share registry. With 58% stake, private companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 25% increase in the stock price last week, private companies profited the most, but institutions who own 24% stock also stood to gain from the increase.

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

View our latest analysis for Zhuguang Holdings Group

What Does The Institutional Ownership Tell Us About Zhuguang Holdings Group?

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.

As you can see, institutional investors have a fair amount of stake in Zhuguang Holdings Group. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Zhuguang Holdings Group's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Zhuguang Holdings Group. Rong De Investments Limited is currently the company's largest shareholder with 58% of shares outstanding. This implies that they have majority interest control of the future of the company. With 22% and 5.8% of the shares outstanding respectively, China Huarong Asset Management Co., Ltd., Asset Management Arm and Fong Wing Cheung are the second and third largest shareholders.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Zhuguang Holdings Group

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.

Shareholders would probably be interested to learn that insiders own shares in Zhuguang Holdings Group Company Limited. In their own names, insiders own HK$78m worth of stock in the HK$1.3b company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 13% stake in Zhuguang Holdings Group. 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 58%, of the Zhuguang Holdings Group stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Zhuguang Holdings Group better, we need to consider many other factors. For instance, we've identified 3 warning signs for Zhuguang Holdings Group (2 make us uncomfortable) that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.