Key Insights

• The considerable ownership by private companies in Lizhong Sitong Light Alloys Group indicates that they collectively have a greater say in management and business strategy
• 58% of the business is held by the top 3 shareholders
• 32% of Lizhong Sitong Light Alloys Group is held by insiders

To get a sense of who is truly in control of Lizhong Sitong Light Alloys Group Co., Ltd. (SZSE:300428), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies with 37% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 6.3% increase in the stock price last week, private companies profited the most, but insiders who own 32% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of Lizhong Sitong Light Alloys Group.

What Does The Institutional Ownership Tell Us About Lizhong Sitong Light Alloys Group?

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.

As you can see, institutional investors have a fair amount of stake in Lizhong Sitong Light Alloys Group. 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 Lizhong Sitong Light Alloys Group's historic earnings and revenue below, but keep in mind there's always more to the story.

Lizhong Sitong Light Alloys Group is not owned by hedge funds. Our data shows that Li Zhong Investment Ltd is the largest shareholder with 36% of shares outstanding. The second and third largest shareholders are Liguo Zang and Lizhong Zang, with an equal amount of shares to their name at 11%. Furthermore, CEO Yongxing Zang is the owner of 11% of the company's shares.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 58% stake.

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 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 Lizhong Sitong Light Alloys Group

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.

It seems insiders own a significant proportion of Lizhong Sitong Light Alloys Group Co., Ltd.. Insiders own CN¥3.7b worth of shares in the CN¥11b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 21% stake in Lizhong Sitong Light Alloys Group. 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 37%, of the Lizhong Sitong Light Alloys Group stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Lizhong Sitong Light Alloys Group better, we need to consider many other factors. Take risks for example - Lizhong Sitong Light Alloys Group has 1 warning sign we think you should be aware of.

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.