Retail investors invested in JC Finance & Tax Interconnect Holdings Ltd. (SZSE:002530) copped the brunt of last week's CN¥397m market cap decline

Key Insights

• JC Finance & Tax Interconnect Holdings' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 21 investors have a majority stake in the company with 43% ownership
• Insider ownership in JC Finance & Tax Interconnect Holdings is 17%

Every investor in JC Finance & Tax Interconnect Holdings Ltd. (SZSE:002530) should be aware of the most powerful shareholder groups. With 57% stake, retail investors 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, retail investors endured the biggest losses as the stock fell by 6.6%.

Let's take a closer look to see what the different types of shareholders can tell us about JC Finance & Tax Interconnect Holdings.

View our latest analysis for JC Finance & Tax Interconnect Holdings

What Does The Institutional Ownership Tell Us About JC Finance & Tax Interconnect Holdings?

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.

Since institutions own only a small portion of JC Finance & Tax Interconnect Holdings, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in JC Finance & Tax Interconnect Holdings. Jiangsu Dongrun Jincai Investment Management Co., Ltd. is currently the company's largest shareholder with 12% of shares outstanding. Zheng Jun Xu is the second largest shareholder owning 7.9% of common stock, and Oriental Engineering Co. Ltd holds about 7.7% of the company stock.

On studying our ownership data, we found that 21 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 JC Finance & Tax Interconnect Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 information suggests that insiders maintain a significant holding in JC Finance & Tax Interconnect Holdings Ltd.. Insiders have a CN¥951m stake in this CN¥5.6b business. 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

The general public, who are usually individual investors, hold a substantial 57% stake in JC Finance & Tax Interconnect Holdings, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

It seems that Private Companies own 21%, of the JC Finance & Tax Interconnect Holdings stock. 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 JC Finance & Tax Interconnect Holdings better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

Of course this may not be the best stock to buy. So take a peek at this free 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.