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Individual Investors Invested in Zoomlion Heavy Industry Science and Technology Co., Ltd. (SZSE:000157) Copped the Brunt of Last Week's CN¥1.9b Market Cap Decline

Simply Wall St ·  {{timeTz}}

A look at the shareholders of Zoomlion Heavy Industry Science and Technology Co., Ltd. (SZSE:000157) can tell us which group is most powerful. The group holding the most number of shares in the company, around 46% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 3.8% decline in share price, individual investors suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Zoomlion Heavy Industry Science and Technology.

View our latest analysis for Zoomlion Heavy Industry Science and Technology

ownership-breakdownSZSE:000157 Ownership Breakdown October 5th 2022

What Does The Institutional Ownership Tell Us About Zoomlion Heavy Industry Science and Technology?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Zoomlion Heavy Industry Science and Technology does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Zoomlion Heavy Industry Science and Technology, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growthSZSE:000157 Earnings and Revenue Growth October 5th 2022

Hedge funds don't have many shares in Zoomlion Heavy Industry Science and Technology. Looking at our data, we can see that the largest shareholder is Hunan Xingxiang Investment Holding Group Co., Ltd. with 15% of shares outstanding. In comparison, the second and third largest shareholders hold about 10% and 4.6% of the stock.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Zoomlion Heavy Industry Science and Technology

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.

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.

Our data suggests that insiders own under 1% of Zoomlion Heavy Industry Science and Technology Co., Ltd. in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around CN¥181m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 46% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zoomlion Heavy Industry Science and Technology. 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

We can see that Private Companies own 27%, of the shares on issue. 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 Zoomlion Heavy Industry Science and Technology better, we need to consider many other factors. To that end, you should be aware of the 4 warning signs we've spotted with Zoomlion Heavy Industry Science and Technology .

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.

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.

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