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
• Institutional ownership in Zhuguang Holdings Group is 23%

A look at the shareholders of Zhuguang Holdings Group Company Limited (HKG:1176) can tell us which group is most powerful. 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.

While private companies were the group that reaped the most benefits after last week's 29% price gain, institutions also received a 23% cut.

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

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

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.

Zhuguang Holdings Group 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Zhuguang Holdings Group's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Zhuguang Holdings Group. The company's largest shareholder is Rong De Investments Limited, with ownership of 58%. With such a huge stake in the ownership, we infer that they have significant 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.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Zhuguang Holdings Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 most recent data indicates that insiders own some shares in Zhuguang Holdings Group Company Limited. It has a market capitalization of just HK$1.7b, and insiders have HK$101m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zhuguang Holdings Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

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:

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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Zhuguang Holdings Group (at least 2 which can't be ignored) , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.