Key Insights

• Significant control over Shanghai Rural Commercial Bank by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 8 shareholders own 54% of the company
• 18% of Shanghai Rural Commercial Bank is held by Institutions

A look at the shareholders of Shanghai Rural Commercial Bank Co., Ltd. (SHSE:601825) can tell us which group is most powerful. The group holding the most number of shares in the company, around 35% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

And individual investors on the other hand have a 31% ownership in the company.

Let's take a closer look to see what the different types of shareholders can tell us about Shanghai Rural Commercial Bank.

What Does The Institutional Ownership Tell Us About Shanghai Rural Commercial Bank?

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.

As you can see, institutional investors have a fair amount of stake in Shanghai Rural Commercial Bank. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Shanghai Rural Commercial Bank, (below). Of course, keep in mind that there are other factors to consider, too.

Shanghai Rural Commercial Bank is not owned by hedge funds. Our data shows that Shanghai International Group Co.,Ltd. is the largest shareholder with 9.3% of shares outstanding. The second and third largest shareholders are Baoshan Iron & Steel Co., Ltd. and China COSCO Shipping Corporation Limited, with an equal amount of shares to their name at 8.3%.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Shanghai Rural Commercial Bank

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 most recent data indicates that insiders own less than 1% of Shanghai Rural Commercial Bank Co., Ltd.. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own CN¥43m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in Shanghai Rural Commercial Bank. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

It seems that Private Companies own 35%, of the Shanghai Rural Commercial Bank stock. 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.

Public Company Ownership

It appears to us that public companies own 8.3% of Shanghai Rural Commercial Bank. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Shanghai Rural Commercial Bank , and understanding them should be part of your investment process.

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.