Chong Fan JinGuan Electric Co., Ltd.'s (SHSE:688517) CEO is the most bullish insider, and their stock value gained 15%last week

Key Insights

• Insiders appear to have a vested interest in JinGuan Electric's growth, as seen by their sizeable ownership
• 52% of the business is held by the top 3 shareholders
• Institutional ownership in JinGuan Electric is 14%

A look at the shareholders of JinGuan Electric Co., Ltd. (SHSE:688517) can tell us which group is most powerful. The group holding the most number of shares in the company, around 42% 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¥268m last week.

Let's delve deeper into each type of owner of JinGuan Electric, beginning with the chart below.

See our latest analysis for JinGuan Electric

What Does The Institutional Ownership Tell Us About JinGuan Electric?

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 JinGuan Electric. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at JinGuan Electric's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in JinGuan Electric. The company's CEO Chong Fan is the largest shareholder with 40% of shares outstanding. With 7.7% and 4.4% of the shares outstanding respectively, Shenzhen Zhongrui Boyuan Investment Center (Limited Partnership) and Shanghai CEL Puyan Equity Investment Management Limited are the second and third largest shareholders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 JinGuan Electric

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 a reasonable proportion of JinGuan Electric Co., Ltd.. It has a market capitalization of just CN¥2.0b, and insiders have CN¥860m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. 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 33% stake in JinGuan Electric. 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 11%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand JinGuan Electric better, we need to consider many other factors. For example, we've discovered 2 warning signs for JinGuan Electric that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

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