Key Insights

• Henan Zhongfu IndustrialLtd's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 25 investors have a majority stake in the company with 42% ownership
• 11% of Henan Zhongfu IndustrialLtd is held by Institutions

Every investor in Henan Zhongfu Industrial Co.,Ltd (SHSE:600595) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 58% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Private companies, on the other hand, account for 23% of the company's stockholders.

Let's delve deeper into each type of owner of Henan Zhongfu IndustrialLtd, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Henan Zhongfu IndustrialLtd?

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 Henan Zhongfu IndustrialLtd. 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. 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 Henan Zhongfu IndustrialLtd, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Henan Zhongfu IndustrialLtd. The company's largest shareholder is Maxon Limited, with ownership of 20%. Henan Yicheng Venture Capital Group Co., Ltd. is the second largest shareholder owning 6.7% of common stock, and Shenzhen Putai Investment Development Co., Ltd. holds about 4.6% of the company 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.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Henan Zhongfu IndustrialLtd

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.

We can see that insiders own shares in Henan Zhongfu Industrial Co.,Ltd. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around CN¥185m worth of shares (at current prices). 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

The general public -- including retail investors -- own 58% of Henan Zhongfu IndustrialLtd. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Equity Ownership

With a stake of 6.7%, private equity firms could influence the Henan Zhongfu IndustrialLtd board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

Our data indicates that Private Companies hold 23%, of the company's shares. 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 Henan Zhongfu IndustrialLtd better, we need to consider many other factors. Take risks for example - Henan Zhongfu IndustrialLtd has 1 warning sign we think you should be aware of.

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.

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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.