Junhe Pumps Holding Co.,Ltd's (SHSE:603617) last week's 12% decline must have disappointed private companies who have a significant stake

Key Insights

• The considerable ownership by private companies in Junhe Pumps HoldingLtd indicates that they collectively have a greater say in management and business strategy
• A total of 5 investors have a majority stake in the company with 52% ownership
• Insider ownership in Junhe Pumps HoldingLtd is 16%

If you want to know who really controls Junhe Pumps Holding Co.,Ltd (SHSE:603617), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 40% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥1.9b last week, private companies would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Junhe Pumps HoldingLtd.

Check out our latest analysis for Junhe Pumps HoldingLtd

What Does The Institutional Ownership Tell Us About Junhe Pumps HoldingLtd?

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.

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

Junhe Pumps HoldingLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Ningbo Junhe Holding Group Co., Ltd. with 33% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.2% and 4.8%, of the shares outstanding, respectively. Furthermore, CEO Jun Bo Zhang is the owner of 3.0% of the company's shares.

On looking further, we found that 52% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Junhe Pumps HoldingLtd

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.

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 Junhe Pumps Holding Co.,Ltd. It has a market capitalization of just CN¥1.9b, and insiders have CN¥298m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 39% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Junhe Pumps HoldingLtd. 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

We can see that Private Companies own 40%, of the shares on issue. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - Junhe Pumps HoldingLtd has 3 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.