Key Insights

• Significant control over Zhongfu Information by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 12 investors have a majority stake in the company with 51% ownership
• 38% of Zhongfu Information is held by insiders

A look at the shareholders of Zhongfu Information Inc. (SZSE:300659) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 9.5% decrease in the stock price last week, individual investors suffered the most losses, but insiders who own 38% stock also took a hit.

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

What Does The Institutional Ownership Tell Us About Zhongfu Information?

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 Zhongfu Information does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Zhongfu Information's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Zhongfu Information. With a 22% stake, CEO Dong Xiao Wei is the largest shareholder. Zhi Jiang Chen is the second largest shareholder owning 12% of common stock, and Zhonggeng Fund Management Co., Ltd. holds about 2.9% of the company stock.

After doing some more digging, we found that the top 12 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Zhongfu Information

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.

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.

It seems insiders own a significant proportion of Zhongfu Information Inc.. Insiders have a CN¥1.8b stake in this CN¥4.7b business. 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

The general public, who are usually individual investors, hold a 46% stake in Zhongfu Information. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 3 warning signs we've spotted with Zhongfu Information (including 2 which don't sit too well with us) .

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.