Key Insights

• Significant insider control over Zhongzhong Science & Technology (Tianjin) implies vested interests in company growth
• 60% of the business is held by the top 2 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Zhongzhong Science & Technology (Tianjin) Co., Ltd. (SHSE:603135), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 67% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, insiders endured the biggest losses as the stock fell by 7.6%.

In the chart below, we zoom in on the different ownership groups of Zhongzhong Science & Technology (Tianjin).

What Does The Lack Of Institutional Ownership Tell Us About Zhongzhong Science & Technology (Tianjin)?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. Alternatively, there might be something about the company that has kept institutional investors away. Zhongzhong Science & Technology (Tianjin) might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Zhongzhong Science & Technology (Tianjin) is not owned by hedge funds. The company's largest shareholder is Bingbing Ma, with ownership of 48%. Fenglan Gu is the second largest shareholder owning 12% of common stock, and Guomao Reducer Group Co., Ltd. holds about 5.6% of the company stock. Furthermore, CEO Hongxin Wang is the owner of 2.4% of the company's shares.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. 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 Zhongzhong Science & Technology (Tianjin)

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.

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 information suggests that insiders own more than half of Zhongzhong Science & Technology (Tianjin) Co., Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥5.6b, that means they have CN¥3.8b 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

The general public, who are usually individual investors, hold a 20% stake in Zhongzhong Science & Technology (Tianjin). 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

We can see that Private Companies own 13%, of the shares on issue. 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. Take risks for example - Zhongzhong Science & Technology (Tianjin) has 2 warning signs we think you should be aware of.

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.