Key Insights

• Significant insider control over Zhuzhou Hongda ElectronicsLtd implies vested interests in company growth
• A total of 2 investors have a majority stake in the company with 64% ownership
• 11% of Zhuzhou Hongda ElectronicsLtd is held by Institutions

To get a sense of who is truly in control of Zhuzhou Hongda Electronics Corp.,Ltd. (SZSE:300726), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 69% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, insiders endured the biggest losses as the stock fell by 6.4%.

Let's delve deeper into each type of owner of Zhuzhou Hongda ElectronicsLtd, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Zhuzhou Hongda ElectronicsLtd?

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.

Zhuzhou Hongda ElectronicsLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Zhuzhou Hongda ElectronicsLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Zhuzhou Hongda ElectronicsLtd. Looking at our data, we can see that the largest shareholder is the CEO Chen Zeng with 34% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 30% and 5.1%, of the shares outstanding, respectively.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Zhuzhou Hongda ElectronicsLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

It seems that insiders own more than half the Zhuzhou Hongda Electronics Corp.,Ltd. stock. This gives them a lot of power. That means insiders have a very meaningful CN¥6.2b stake in this CN¥9.0b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zhuzhou Hongda ElectronicsLtd. 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.

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 instance, we've identified 1 warning sign for Zhuzhou Hongda ElectronicsLtd that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.