Key Insights

• The considerable ownership by private companies in Shenzhen Cheng Chung Design indicates that they collectively have a greater say in management and business strategy
• 54% of the company is held by a single shareholder (Shenzhen Yatai Yizhao Investment Co., Ltd.)
• Insider ownership in Shenzhen Cheng Chung Design is 18%

To get a sense of who is truly in control of Shenzhen Cheng Chung Design Co., Ltd. (SZSE:002811), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 54% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies collectively scored the highest last week as the company hit CN¥2.7b market cap following a 22% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Shenzhen Cheng Chung Design.

What Does The Institutional Ownership Tell Us About Shenzhen Cheng Chung Design?

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.

Institutions have a very small stake in Shenzhen Cheng Chung Design. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. 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.

Shenzhen Cheng Chung Design is not owned by hedge funds. Our data shows that Shenzhen Yatai Yizhao Investment Co., Ltd. is the largest shareholder with 54% of shares outstanding. This implies that they have majority interest control of the future of the company. Zhong Zheng is the second largest shareholder owning 12% of common stock, and Lin Lin holds about 2.6% of the company stock.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Shenzhen Cheng Chung Design

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

It seems insiders own a significant proportion of Shenzhen Cheng Chung Design Co., Ltd.. It has a market capitalization of just CN¥2.7b, and insiders have CN¥478m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shenzhen Cheng Chung Design. 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

We can see that Private Companies own 54%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shenzhen Cheng Chung Design better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Shenzhen Cheng Chung Design (of which 1 shouldn't be ignored!) you should know about.

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.