Private companies in Shanghai Jin Jiang International Hotels Co., Ltd. (SHSE:600754) are its biggest bettors, and their bets paid off as stock gained 3.2% last week

Key Insights

• The considerable ownership by private companies in Shanghai Jin Jiang International Hotels indicates that they collectively have a greater say in management and business strategy
• The top 5 shareholders own 50% of the company
• Institutions own 15% of Shanghai Jin Jiang International Hotels

To get a sense of who is truly in control of Shanghai Jin Jiang International Hotels Co., Ltd. (SHSE:600754), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies with 45% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, private companies benefitted the most after the company's market cap rose by CN¥770m last week.

Let's delve deeper into each type of owner of Shanghai Jin Jiang International Hotels, beginning with the chart below.

See our latest analysis for Shanghai Jin Jiang International Hotels

What Does The Institutional Ownership Tell Us About Shanghai Jin Jiang International Hotels?

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.

Shanghai Jin Jiang International Hotels already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Shanghai Jin Jiang International Hotels' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Shanghai Jin Jiang International Hotels. Jinjiang International Holdings Co.,Ltd is currently the company's largest shareholder with 45% of shares outstanding. Yinhua Fund Management Co., Ltd. is the second largest shareholder owning 1.5% of common stock, and Allianz Asset Management GmbH holds about 1.4% of the company stock.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Shanghai Jin Jiang International Hotels

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Shanghai Jin Jiang International Hotels Co., Ltd. insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around CN¥2.2m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 40% stake in Shanghai Jin Jiang International Hotels. 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

We can see that Private Companies own 45%, of the shares on issue. 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:

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. Take risks for example - Shanghai Jin Jiang International Hotels has 2 warning signs we think you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com