After the recent decline, JiangXi BaiSheng Intelligent Technology Co., Ltd. (SZSE:301083) CEO Rungen Liu's holdings have lost 11% of their value

Key Insights

• JiangXi BaiSheng Intelligent Technology's significant insider ownership suggests inherent interests in company's expansion
• 54% of the business is held by the top 2 shareholders
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in JiangXi BaiSheng Intelligent Technology Co., Ltd. (SZSE:301083) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 69% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders as a group endured the highest losses after market cap fell by CN¥334m.

In the chart below, we zoom in on the different ownership groups of JiangXi BaiSheng Intelligent Technology.

See our latest analysis for JiangXi BaiSheng Intelligent Technology

What Does The Institutional Ownership Tell Us About JiangXi BaiSheng Intelligent Technology?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

JiangXi BaiSheng Intelligent Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 JiangXi BaiSheng Intelligent Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

JiangXi BaiSheng Intelligent Technology is not owned by hedge funds. The company's CEO Rungen Liu is the largest shareholder with 39% of shares outstanding. In comparison, the second and third largest shareholders hold about 16% and 15% of the stock. Interestingly, the third-largest shareholder, Weining Gong is also a Vice Chairman, again, indicating strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence 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. 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 JiangXi BaiSheng Intelligent 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 own more than half of JiangXi BaiSheng Intelligent Technology Co., Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥2.6b, that means they have CN¥1.8b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 24% stake in the company, and hence can't easily be ignored. 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.

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. To that end, you should learn about the 3 warning signs we've spotted with JiangXi BaiSheng Intelligent Technology (including 2 which shouldn't be ignored) .

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.

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