Key Insights

• Significant control over Zenner Metering Technology (Shanghai) by private companies implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 2 shareholders
• Insiders own 31% of Zenner Metering Technology (Shanghai)

Every investor in Zenner Metering Technology (Shanghai) Ltd. (SZSE:301303) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 39% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 7.5% decrease in the stock price last week, private companies suffered the most losses, but insiders who own 31% stock also took a hit.

Let's take a closer look to see what the different types of shareholders can tell us about Zenner Metering Technology (Shanghai).

What Does The Lack Of Institutional Ownership Tell Us About Zenner Metering Technology (Shanghai)?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

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. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Zenner Metering Technology (Shanghai), for yourself, below.

We note that hedge funds don't have a meaningful investment in Zenner Metering Technology (Shanghai). Zenner Meters (Shanghai) Ltd. is currently the company's largest shareholder with 36% of shares outstanding. In comparison, the second and third largest shareholders hold about 15% and 7.2% of the stock. Interestingly, the bottom two of the top three shareholders also hold the title of Chief Executive Officer and Member of the Board of Directors, respectively, suggesting that these insiders have a personal stake in the company.

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 50% 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Zenner Metering Technology (Shanghai)

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders maintain a significant holding in Zenner Metering Technology (Shanghai) Ltd.. It has a market capitalization of just CN¥5.9b, and insiders have CN¥1.8b worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 30% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zenner Metering Technology (Shanghai). 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 39%, of the shares on issue. 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 Zenner Metering Technology (Shanghai) better, we need to consider many other factors. Be aware that Zenner Metering Technology (Shanghai) is showing 2 warning signs in our investment analysis , 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.