Jinlei Technology Co., Ltd.'s (SZSE:300443) last week's 8.1% decline must have disappointed retail investors who have a significant stake

Key Insights

• The considerable ownership by retail investors in Jinlei Technology indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 48% of the company
• Insider ownership in Jinlei Technology is 35%

If you want to know who really controls Jinlei Technology Co., Ltd. (SZSE:300443), 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 52% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of retail investors took a hit after last week’s 8.1% price drop, insiders with their 35% also suffered.

In the chart below, we zoom in on the different ownership groups of Jinlei Technology.

See our latest analysis for Jinlei Technology

What Does The Institutional Ownership Tell Us About Jinlei Technology?

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 Jinlei Technology 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. 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 Jinlei Technology's earnings history below. Of course, the future is what really matters.

Jinlei Technology is not owned by hedge funds. The company's largest shareholder is Tinglei Yi, with ownership of 32%. Dong Qiao Su is the second largest shareholder owning 2.4% of common stock, and National Council for Social Security Fund holds about 2.3% of the company stock.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Jinlei Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that insiders maintain a significant holding in Jinlei Technology Co., Ltd.. It has a market capitalization of just CN¥6.8b, and insiders have CN¥2.4b 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 substantial 52% stake in Jinlei Technology, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

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

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.