Qingdao Zhongzi Zhongcheng Group Co.,Ltd.'s (SZSE:300208) Last Week's 8.8% Decline Must Have Disappointed Private Companies Who Have a Significant Stake

Simply Wall St ·  12/16/2022 07:30

If you want to know who really controls Qingdao Zhongzi Zhongcheng Group Co.,Ltd. (SZSE:300208), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 35% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, private companies endured the biggest losses as the stock fell by 8.8%.

Let's take a closer look to see what the different types of shareholders can tell us about Qingdao Zhongzi Zhongcheng GroupLtd.

View our latest analysis for Qingdao Zhongzi Zhongcheng GroupLtd

ownership-breakdownSZSE:300208 Ownership Breakdown December 15th 2022

What Does The Institutional Ownership Tell Us About Qingdao Zhongzi Zhongcheng GroupLtd?

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.

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

earnings-and-revenue-growthSZSE:300208 Earnings and Revenue Growth December 15th 2022

We note that hedge funds don't have a meaningful investment in Qingdao Zhongzi Zhongcheng GroupLtd. Qingdao City Construction Investment (Group) Limited is currently the company's largest shareholder with 22% of shares outstanding. Yi Ming Dai is the second largest shareholder owning 10% of common stock, and Xiao Yu Jia holds about 10% of the company stock. Xiao Yu Jia, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

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. 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 Qingdao Zhongzi Zhongcheng GroupLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 Qingdao Zhongzi Zhongcheng Group Co.,Ltd.. It is very interesting to see that insiders have a meaningful CN¥2.0b stake in this CN¥7.7b business. 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 33% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 35%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Qingdao Zhongzi Zhongcheng GroupLtd that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

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