Insiders were the key beneficiaries as JiangSu Changling Hydraulic Co.,Ltd's (SHSE:605389) market cap rises to CN¥2.7b

Key Insights

• Insiders appear to have a vested interest in JiangSu Changling HydraulicLtd's growth, as seen by their sizeable ownership
• A total of 2 investors have a majority stake in the company with 68% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls JiangSu Changling Hydraulic Co.,Ltd (SHSE:605389), 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 72% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥295m last week.

Let's take a closer look to see what the different types of shareholders can tell us about JiangSu Changling HydraulicLtd.

See our latest analysis for JiangSu Changling HydraulicLtd

What Does The Institutional Ownership Tell Us About JiangSu Changling HydraulicLtd?

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.

We can see that JiangSu Changling HydraulicLtd does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see JiangSu Changling HydraulicLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

JiangSu Changling HydraulicLtd is not owned by hedge funds. Jifa Xia is currently the company's largest shareholder with 41% of shares outstanding. For context, the second largest shareholder holds about 27% of the shares outstanding, followed by an ownership of 4.0% by the third-largest shareholder. Zemin Xia, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of JiangSu Changling HydraulicLtd

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.

Our most recent data indicates that insiders own the majority of JiangSu Changling Hydraulic Co.,Ltd. This means they can collectively make decisions for the company. So they have a CN¥2.0b stake in this CN¥2.7b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over JiangSu Changling HydraulicLtd. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 4.4%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand JiangSu Changling HydraulicLtd better, we need to consider many other factors. Be aware that JiangSu Changling HydraulicLtd is showing 2 warning signs in our investment analysis , you should know about...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.