Jiangxi Guoguang Commercial Chains Co., Ltd.'s (SHSE:605188) market cap dropped CN¥496m last week; Private companies bore the brunt

Key Insights

• The considerable ownership by private companies in Jiangxi Guoguang Commercial Chains indicates that they collectively have a greater say in management and business strategy
• Jiangxi Guoguang Industrial Co., Ltd. owns 51% of the company
• Insiders own 36% of Jiangxi Guoguang Commercial Chains

If you want to know who really controls Jiangxi Guoguang Commercial Chains Co., Ltd. (SHSE:605188), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 52% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of private companies took a hit after last week’s 13% price drop, insiders with their 36% also suffered.

Let's delve deeper into each type of owner of Jiangxi Guoguang Commercial Chains, beginning with the chart below.

Check out our latest analysis for Jiangxi Guoguang Commercial Chains

What Does The Institutional Ownership Tell Us About Jiangxi Guoguang Commercial Chains?

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.

Less than 5% of Jiangxi Guoguang Commercial Chains is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. 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.

We note that hedge funds don't have a meaningful investment in Jiangxi Guoguang Commercial Chains. Our data shows that Jiangxi Guoguang Industrial Co., Ltd. is the largest shareholder with 51% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Jingen Hu is the second largest shareholder owning 17% of common stock, and Shulan Jiang holds about 8.7% of the company stock. Shulan Jiang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. In addition, we found that Zhichao Hu, the CEO has 4.4% of the shares allocated to their name.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Jiangxi Guoguang Commercial Chains

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. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own a reasonable proportion of Jiangxi Guoguang Commercial Chains Co., Ltd.. It has a market capitalization of just CN¥3.3b, and insiders have CN¥1.2b worth of shares in their own names. 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 10% stake in Jiangxi Guoguang Commercial Chains. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 52%, of the Jiangxi Guoguang Commercial Chains stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private 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. Be aware that Jiangxi Guoguang Commercial Chains is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

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.