Key Insights

• Significant control over Zhejiang Wufangzhai Industry by private companies implies that the general public has more power to influence management and governance-related decisions
• A total of 2 investors have a majority stake in the company with 56% ownership
• Institutional ownership in Zhejiang Wufangzhai Industry is 31%

Every investor in Zhejiang Wufangzhai Industry Co., Ltd. (SHSE:603237) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 39% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Private companies gained the most after market cap touched CN¥3.0b last week, while institutions who own 31% also benefitted.

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

What Does The Institutional Ownership Tell Us About Zhejiang Wufangzhai Industry?

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 Zhejiang Wufangzhai Industry does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Zhejiang Wufangzhai Industry's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Zhejiang Wufangzhai Industry. Our data shows that Wufangzhai Group Co., Ltd. is the largest shareholder with 38% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 18% and 5.6%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Zhejiang Wufangzhai Industry

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Shareholders would probably be interested to learn that insiders own shares in Zhejiang Wufangzhai Industry Co., Ltd.. As individuals, the insiders collectively own CN¥34m worth of the CN¥3.0b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 28% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 39%, of the Zhejiang Wufangzhai Industry 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for Zhejiang Wufangzhai Industry you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.