Key Insights

• Significant control over Zhejiang Shuanghuan DrivelineLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 23 shareholders
• 24% of Zhejiang Shuanghuan DrivelineLtd is held by insiders

To get a sense of who is truly in control of Zhejiang Shuanghuan Driveline Co.,Ltd. (SZSE:002472), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 40% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While individual investors were the group that benefitted the most from last week's CN¥649m market cap gain, institutions too had a 34% share in those profits.

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

See our latest analysis for Zhejiang Shuanghuan DrivelineLtd

What Does The Institutional Ownership Tell Us About Zhejiang Shuanghuan DrivelineLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Zhejiang Shuanghuan DrivelineLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Shuanghuan DrivelineLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Zhejiang Shuanghuan DrivelineLtd. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Zhejiang Shuanghuan DrivelineLtd's case, its Other Key Executive, Changhong Wu, is the largest shareholder, holding 7.1% of shares outstanding. With 4.8% and 4.8% of the shares outstanding respectively, Shaoguang Li and Zhong Ou Fund Management Co., Ltd are the second and third largest shareholders.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 23 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Zhejiang Shuanghuan DrivelineLtd

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Zhejiang Shuanghuan Driveline Co.,Ltd.. It has a market capitalization of just CN¥22b, and insiders have CN¥5.2b worth of shares in their own names. That's quite significant. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zhejiang Shuanghuan DrivelineLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Zhejiang Shuanghuan DrivelineLtd better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.