Jafron Biomedical Co.,Ltd. (SZSE:300529) insiders have significant skin in the game with 51% ownership

Key Insights

• Significant insider control over Jafron BiomedicalLtd implies vested interests in company growth
• A total of 3 investors have a majority stake in the company with 50% ownership
• 12% of Jafron BiomedicalLtd is held by Institutions

Every investor in Jafron Biomedical Co.,Ltd. (SZSE:300529) should be aware of the most powerful shareholder groups. With 51% 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.

With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.

Let's take a closer look to see what the different types of shareholders can tell us about Jafron BiomedicalLtd.

Check out 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.

We can see that Jafron BiomedicalLtd does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Jafron BiomedicalLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Jafron BiomedicalLtd is not owned by hedge funds. With a 46% stake, CEO Fan Dong is the largest shareholder. In comparison, the second and third largest shareholders hold about 2.8% and 1.8% of the stock. 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.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 Jafron Biomedical Co.,Ltd. stock. This gives them a lot of power. That means insiders have a very meaningful CN¥10b stake in this CN¥20b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public-- including retail investors -- own 35% stake in the company, and hence can't easily be ignored. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Jafron BiomedicalLtd better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Jafron BiomedicalLtd , and understanding them should be part of your investment process.

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.