Key Insights

• Guangdong Zhengye TechnologyLtd's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 16 shareholders own 45% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Guangdong Zhengye Technology Co.,Ltd. (SZSE:300410) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 55% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, retail investors were the biggest beneficiaries of last week's 29% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Guangdong Zhengye TechnologyLtd.

What Does The Institutional Ownership Tell Us About Guangdong Zhengye TechnologyLtd?

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.

We can see that Guangdong Zhengye TechnologyLtd does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Guangdong Zhengye TechnologyLtd's earnings history below. Of course, the future is what really matters.

Guangdong Zhengye TechnologyLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Jingdezhen Hesheng Industrial Investment Development Co.,Ltd. with 22% of shares outstanding. With 13% and 2.8% of the shares outstanding respectively, Suqian Chulian Technology Co., Ltd. and Shenzhen Hi Tech Investment and Financing Guarantee Co., Ltd., Asset Management Arm are the second and third largest shareholders.

A deeper look at our ownership data shows that the top 16 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 Guangdong Zhengye TechnologyLtd

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.

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 data suggests that insiders own under 1% of Guangdong Zhengye Technology Co.,Ltd. in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It seems the board members have no more than CN¥1.5m worth of shares in the CN¥2.1b company. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public -- including retail investors -- own 55% of Guangdong Zhengye TechnologyLtd. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

We can see that Private Companies own 36%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Guangdong Zhengye TechnologyLtd better, we need to consider many other factors. For example, we've discovered 2 warning signs for Guangdong Zhengye TechnologyLtd that you should be aware of before investing here.

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.