Key Insights

• Zhejiang Shuanghuan DrivelineLtd's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 47% of the business is held by the top 25 shareholders
• Insiders own 24% of Zhejiang Shuanghuan DrivelineLtd

Every investor in Zhejiang Shuanghuan Driveline Co.,Ltd. (SZSE:002472) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 42% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Institutions, on the other hand, account for 31% of the company's stockholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.

Let's delve deeper into each type of owner of Zhejiang Shuanghuan DrivelineLtd, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Zhejiang Shuanghuan DrivelineLtd?

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.

Zhejiang Shuanghuan DrivelineLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Zhejiang Shuanghuan DrivelineLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Zhejiang Shuanghuan DrivelineLtd. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Zhejiang Shuanghuan DrivelineLtd's case, its Other Key Executive, Changhong Wu, is the largest shareholder, holding 7.2% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.9% and 3.5% of the stock. Interestingly, the third-largest shareholder, Yiqing Jiang is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Zhejiang Shuanghuan DrivelineLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 maintain a significant holding in Zhejiang Shuanghuan Driveline Co.,Ltd.. It is very interesting to see that insiders have a meaningful CN¥4.7b stake in this CN¥20b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 42% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zhejiang Shuanghuan DrivelineLtd. 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.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com