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What You Need To Know About Bank of Zhengzhou Co., Ltd.'s (HKG:6196) Investor Composition

Simply Wall St ·  Jul 15, 2022 18:30

The big shareholder groups in Bank of Zhengzhou Co., Ltd. (HKG:6196) have power over the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that have been privatized tend to have low insider ownership.

Bank of Zhengzhou isn't enormous, but it's not particularly small either. It has a market capitalization of HK$22b, which means it would generally expect to see some institutions on the share registry. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Bank of Zhengzhou.

View our latest analysis for Bank of Zhengzhou

ownership-breakdownSEHK:6196 Ownership Breakdown July 15th 2022

What Does The Institutional Ownership Tell Us About Bank of Zhengzhou?

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.

Bank of Zhengzhou already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Bank of Zhengzhou's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growthSEHK:6196 Earnings and Revenue Growth July 15th 2022

We note that hedge funds don't have a meaningful investment in Bank of Zhengzhou. Our data shows that Zhengzhou Municipal Finance Bureau is the largest shareholder with 8.0% of shares outstanding. With 5.4% and 4.2% of the shares outstanding respectively, Zhengzhou Zhongrongchuang Industrial Investment Co., Ltd. and Bridge Trust Co., Ltd are the second and third largest shareholders.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 16 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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Bank of Zhengzhou

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

We can see that insiders own shares in Bank of Zhengzhou Co., Ltd.. The insiders have a meaningful stake worth HK$628m. Most would see this as a real positive. It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Bank of Zhengzhou. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 39%, of the Bank of Zhengzhou 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Bank of Zhengzhou better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Bank of Zhengzhou .

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.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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