Jafron Biomedical Co.,Ltd. (SZSE:300529) CEO Fan Dong, the company's largest shareholder sees 11% reduction in holdings value

Key Insights

• Jafron BiomedicalLtd's significant insider ownership suggests inherent interests in company's expansion
• The top 3 shareholders own 51% of the company
• Institutions own 10% of Jafron BiomedicalLtd

To get a sense of who is truly in control of Jafron Biomedical Co.,Ltd. (SZSE:300529), it is important to understand the ownership structure of the business. With 52% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, insiders endured the biggest losses as the stock fell by 11%.

In the chart below, we zoom in on the different ownership groups of Jafron BiomedicalLtd.

See our latest analysis for Jafron BiomedicalLtd

What Does The Institutional Ownership Tell Us About Jafron BiomedicalLtd?

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.

Jafron BiomedicalLtd 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 Jafron BiomedicalLtd's earnings history below. Of course, the future is what really matters.

Jafron BiomedicalLtd is not owned by hedge funds. The company's CEO Fan Dong is the largest shareholder with 46% of shares outstanding. For context, the second largest shareholder holds about 2.8% of the shares outstanding, followed by an ownership of 1.8% by the third-largest shareholder. Interestingly, the second-largest shareholder, Xian Min Tang is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Jafron BiomedicalLtd

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.

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 information suggests that insiders own more than half of Jafron Biomedical Co.,Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥23b, that means insiders have a whopping CN¥12b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public, who are usually individual investors, hold a 36% stake in Jafron BiomedicalLtd. 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.

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 - Jafron BiomedicalLtd has 1 warning sign 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.