Jinhua Chunguang Technology Co.,Ltd's (SHSE:603657) market cap increased by CN¥144m, insiders receive a 64% cut

Key Insights

• Jinhua Chunguang TechnologyLtd's significant insider ownership suggests inherent interests in company's expansion
• Zhengming Chen owns 57% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Jinhua Chunguang Technology Co.,Ltd (SHSE:603657) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 64% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit CN¥1.5b market cap following a 10% gain in the stock.

Let's delve deeper into each type of owner of Jinhua Chunguang TechnologyLtd, beginning with the chart below.

See our latest analysis for Jinhua Chunguang TechnologyLtd

What Does The Institutional Ownership Tell Us About Jinhua Chunguang TechnologyLtd?

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.

Jinhua Chunguang TechnologyLtd 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. 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 Jinhua Chunguang TechnologyLtd's earnings history below. Of course, the future is what really matters.

Jinhua Chunguang TechnologyLtd is not owned by hedge funds. The company's largest shareholder is Zhengming Chen, with ownership of 57%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 4.6% and 4.3%, of the shares outstanding, respectively. Kai Chen, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Jinhua Chunguang TechnologyLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems that insiders own more than half the Jinhua Chunguang Technology Co.,Ltd stock. This gives them a lot of power. So they have a CN¥976m stake in this CN¥1.5b 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 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Jinhua Chunguang TechnologyLtd. 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 5.1%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with Jinhua Chunguang TechnologyLtd .

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.