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Shares of Changzhou Zhongying Science & Technology Co., Ltd (SZSE:300936) CEO Weizhong Yu fell 11% in value following the recent downturn

Key insights

  • Significant insider control over Changzhou Zhongying Science & Technology implies vested interest in the company’s growth
  • The 3 largest shareholders own 51% of the company
  • Property research, combined with past performance data, can help provide a good understanding of the opportunities in a stock market.

To get a sense of who really controls Changzhou Zhongying Science & Technology Co., Ltd (SZSE:300936), it’s important to understand the company’s ownership structure. And the group that controls the largest slice of the pie are individual insiders with 50% ownership. In other words, the group has the greatest upside potential (or downside risk).

When the market capitalization fell to CN¥2.8 billion last week, insiders faced the highest losses of any other shareholder group in the company.

Let’s dive deeper into each type of Changzhou Zhongying Science & Technology owner, starting with the chart below.

View our latest analysis for Changzhou Zhongying Science & Technology

SZSE:300936 Ownership Distribution July 21, 2024

What does institutional ownership tell us about Changzhou Zhongying Science & Technology?

Institutional investors often compare their own returns to the returns of a widely used index. They therefore usually consider buying larger companies that are included in the relevant benchmark index.

Since institutions only own a small portion of Changzhou Zhongying Science & Technology, many may not have spent much time considering the stock. But clearly, some did; and they liked it enough to buy. So if the company itself can improve over time, we may see more institutional buyers in the future. It’s not uncommon to see a large increase in the share price if multiple institutional investors try to buy a stock at the same time. So take a look at the historical earnings trajectory below, but keep in mind that the future counts most.

SZSE:300936 Earnings and Revenue Growth July 21, 2024

Hedge funds don’t hold much stock in Changzhou Zhongying Science & Technology. With a 24% stake, CEO Weizhong Yu is the largest shareholder. In comparison, the second-largest shareholder holds about 18% of the outstanding shares, followed by a 10.0% ownership by the third-largest shareholder. Interestingly, the second-largest shareholder, Cheng Yu, is also the company’s secretary, again indicating strong insider ownership among the company’s top shareholders.

A closer look at the shareholder register revealed that three of the largest shareholders hold a significant portion of the company’s ownership, namely 51% of the shares.

Researching institutional ownership is a good way to gauge and filter the expected performance of a stock. The same can be achieved by studying analyst sentiments. We do not pick up any analyst coverage on the stock at the moment, so it is unlikely that the company is widely held.

Insider-owned Changzhou Zhongying Science & Technology

The definition of an insider can vary slightly from country to country, but members of the board of directors always count. A company’s management runs the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally view insider ownership as a good thing. However, sometimes it makes it harder for other shareholders to hold the board accountable for decisions.

Our latest data indicates that insiders own the majority of Changzhou Zhongying Science & Technology Co., Ltd. This means that they can collectively make decisions for the company. Given that it has a market cap of CN¥2.8 billion, that means they have CN¥1.4 billion worth of shares. It’s good to see this level of investment. You can check if those insiders have been buying recently here.

General public property

The general public, including private investors, owns 32% of the company’s shares and therefore cannot simply be ignored. This size of ownership, while significant, may not be enough to change the company’s policy if the decision is not in line with that of other major shareholders.

Owned by a private company

We can see that Private Companies hold 14% of the issued shares. Private companies can be related parties. Sometimes insiders have an interest in a listed company through a holding company in a private company, rather than in their own capacity as an individual. While it is difficult to draw general conclusions, it is worth mentioning as an area for further research.

Next steps:

While it is worth considering the different groups that own a company, there are other factors that are even more important. For example, we found 3 Warning Signs for Changzhou Zhongying Science & Technology what you should be aware of, and 2 of which you cannot ignore.

Naturally this may not be the best stock to buyTherefore, you may want to check out our free collection of interesting prospects with favorable financial results.

NB: The figures in this article have been calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month in which the financial statement is dated. This may not correspond to the figures in the full annual report.

Valuation is complex, but we make it simple.

Find out whether Changzhou Zhongying Science & Technology may be over or undervalued by exploring our comprehensive analysis, which includes: fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the free analysis

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This article from Simply Wall St is general in nature. We comment solely on historical data and analyst forecasts, using an objective methodology. Our articles are not intended as financial advice. It does not constitute a recommendation to buy or sell any shares and does not take into account your objectives or financial situation. We aim to provide you with a long-term analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in the shares mentioned.

Valuation is complex, but we make it simple.

Find out whether Changzhou Zhongying Science & Technology may be over or undervalued by exploring our comprehensive analysis, which includes: fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the free analysis

Do you have feedback on this article? Are you concerned about the content? Please contact us directly. You can also send an email to [email protected]