Jiangsu Pacific Precision Forging Co., Ltd.'s (SZSE:300258) market cap dropped CN¥429m last week; Private companies bore the brunt

Key Insights

• Significant control over Jiangsu Pacific Precision Forging by private companies implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 5 shareholders
• Institutional ownership in Jiangsu Pacific Precision Forging is 13%

A look at the shareholders of Jiangsu Pacific Precision Forging Co., Ltd. (SZSE:300258) can tell us which group is most powerful. With 40% stake, private companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, private companies endured the biggest losses as the stock fell by 9.2%.

Let's delve deeper into each type of owner of Jiangsu Pacific Precision Forging, beginning with the chart below.

Check out our latest analysis for Jiangsu Pacific Precision Forging

What Does The Institutional Ownership Tell Us About Jiangsu Pacific Precision Forging?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Jiangsu Pacific Precision Forging. 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 Jiangsu Pacific Precision Forging, (below). Of course, keep in mind that there are other factors to consider, too.

Jiangsu Pacific Precision Forging is not owned by hedge funds. The company's largest shareholder is Jiangsu Dayang Investment Co., Ltd., with ownership of 40%. With 3.8% and 2.3% of the shares outstanding respectively, Hanguan Xia and Jing Huang are the second and third largest shareholders. Hanguan Xia, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

Our research also brought to light the fact that roughly 50% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Jiangsu Pacific Precision Forging

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own some shares in Jiangsu Pacific Precision Forging Co., Ltd.. As individuals, the insiders collectively own CN¥406m worth of the CN¥4.3b company. This shows at least some alignment. 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 35% stake in Jiangsu Pacific Precision Forging. 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 40%, 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 Jiangsu Pacific Precision Forging that you should be aware of before investing here.

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.