Key Insights

• The considerable ownership by private companies in Shanghai Zhongchen Electronic TechnologyLtd indicates that they collectively have a greater say in management and business strategy
• 57% of the business is held by the top 3 shareholders
• Insider ownership in Shanghai Zhongchen Electronic TechnologyLtd is 25%

If you want to know who really controls Shanghai Zhongchen Electronic Technology Co.,Ltd. (SHSE:603275), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 43% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private companies were the biggest beneficiaries of last week's 8.5% gain.

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

What Does The Institutional Ownership Tell Us About Shanghai Zhongchen Electronic 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.

Less than 5% of Shanghai Zhongchen Electronic TechnologyLtd is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Shanghai Zhongchen Electronic TechnologyLtd is not owned by hedge funds. The company's largest shareholder is Shanghai Zhongting Intelligent Technology Co., Ltd., with ownership of 33%. For context, the second largest shareholder holds about 16% of the shares outstanding, followed by an ownership of 7.8% by the third-largest shareholder. Jianjun Zhang, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 Shanghai Zhongchen Electronic TechnologyLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in Shanghai Zhongchen Electronic Technology Co.,Ltd.. It has a market capitalization of just CN¥4.9b, and insiders have CN¥1.2b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 30% stake in Shanghai Zhongchen Electronic TechnologyLtd. 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

It seems that Private Companies own 43%, of the Shanghai Zhongchen Electronic TechnologyLtd stock. 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 Shanghai Zhongchen Electronic TechnologyLtd better, we need to consider many other factors. Be aware that Shanghai Zhongchen Electronic TechnologyLtd is showing 1 warning sign in our investment analysis , you should know about...

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.