Key Insights

• The considerable ownership by private companies in Zhejiang Zhongjian TechnologyLtd indicates that they collectively have a greater say in management and business strategy
• 52% of the business is held by the top 4 shareholders
• Insider ownership in Zhejiang Zhongjian TechnologyLtd is 32%

A look at the shareholders of Zhejiang Zhongjian Technology Co.,Ltd (SZSE:002779) can tell us which group is most powerful. We can see that private companies own the lion's share in the company with 34% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 13% increase in the stock price last week, private companies profited the most, but insiders who own 32% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of Zhejiang Zhongjian TechnologyLtd.

What Does The Institutional Ownership Tell Us About Zhejiang Zhongjian 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.

As you can see, institutional investors have a fair amount of stake in Zhejiang Zhongjian TechnologyLtd. 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 Zhejiang Zhongjian TechnologyLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Zhejiang Zhongjian TechnologyLtd is not owned by hedge funds. Zhongjian Electromechanical Group Co., Ltd. is currently the company's largest shareholder with 32% of shares outstanding. Minggen Wu is the second largest shareholder owning 11% of common stock, and Gaochao Lin holds about 5.0% of the company stock. Minggen Wu, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Zhejiang Zhongjian TechnologyLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems insiders own a significant proportion of Zhejiang Zhongjian Technology Co.,Ltd. It has a market capitalization of just CN¥9.6b, and insiders have CN¥3.1b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public-- including retail investors -- own 27% stake in the company, and hence can't easily be ignored. 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 34%, of the Zhejiang Zhongjian TechnologyLtd 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. To that end, you should be aware of the 2 warning signs we've spotted with Zhejiang Zhongjian TechnologyLtd .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.