Key Insights

• The considerable ownership by retail investors in Zhejiang Runtu indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 11 shareholders
• Insiders own 46% of Zhejiang Runtu

If you want to know who really controls Zhejiang Runtu Co., Ltd. (SZSE:002440), then you'll have to look at the makeup of its share registry. We can see that retail investors own the lion's share in the company with 48% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While retail investors were the group that reaped the most benefits after last week's 6.6% price gain, insiders also received a 46% cut.

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

What Does The Institutional Ownership Tell Us About Zhejiang Runtu?

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 Zhejiang Runtu 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Zhejiang Runtu's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Zhejiang Runtu. Jing Bo Ruan is currently the largest shareholder, with 22% of shares outstanding. For context, the second largest shareholder holds about 17% of the shares outstanding, followed by an ownership of 4.6% by the third-largest shareholder. Jia Chun Ruan, who is the third-largest shareholder, also happens to hold the title of Vice Chairman. Furthermore, CEO Wan Fu Xu is the owner of 1.1% of the company's shares.

A closer look at our ownership figures suggests that the top 11 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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

Insider Ownership Of Zhejiang Runtu

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.

Our information suggests that insiders maintain a significant holding in Zhejiang Runtu Co., Ltd.. It has a market capitalization of just CN¥7.4b, and insiders have CN¥3.4b 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

With a 48% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zhejiang Runtu. 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. Take risks for example - Zhejiang Runtu has 4 warning signs (and 2 which are significant) we think you should know about.

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.

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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.