Jinhong Gas Co.,Ltd. (SHSE:688106) CEO Xianghua Jin, the company's largest shareholder sees 4.9% reduction in holdings value

Key Insights

• Significant insider control over Jinhong GasLtd implies vested interests in company growth
• 52% of the business is held by the top 4 shareholders
• 16% of Jinhong GasLtd is held by Institutions

Every investor in Jinhong Gas Co.,Ltd. (SHSE:688106) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 48% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 4.9% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Jinhong GasLtd.

Check out our latest analysis for Jinhong GasLtd

What Does The Institutional Ownership Tell Us About Jinhong GasLtd?

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.

We can see that Jinhong GasLtd 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 Jinhong GasLtd, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Jinhong GasLtd. The company's CEO Xianghua Jin is the largest shareholder with 39% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.6% and 3.1%, of the shares outstanding, respectively.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Jinhong GasLtd

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.

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 most recent data indicates that insiders own a reasonable proportion of Jinhong Gas Co.,Ltd.. It has a market capitalization of just CN¥8.1b, and insiders have CN¥3.9b worth of shares in their own names. That's quite significant. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 36% stake in Jinhong GasLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Jinhong GasLtd (at least 1 which can't be ignored) , 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.