Jilin Joinature Polymer Co.,Ltd.'s (SHSE:688716) last week's 11% decline must have disappointed individual investors who have a significant stake

Key Insights

• Significant control over Jilin Joinature PolymerLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 10 shareholders
• Insider ownership in Jilin Joinature PolymerLtd is 41%

Every investor in Jilin Joinature Polymer Co.,Ltd. (SHSE:688716) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 48% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders who own 41% came under pressure after market cap dropped to CN¥2.3b last week,individual investors took the most losses.

Let's delve deeper into each type of owner of Jilin Joinature PolymerLtd, beginning with the chart below.

View our latest analysis for Jilin Joinature PolymerLtd

What Does The Institutional Ownership Tell Us About Jilin Joinature PolymerLtd?

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 Jilin Joinature PolymerLtd 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Jilin Joinature PolymerLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Jilin Joinature PolymerLtd. Looking at our data, we can see that the largest shareholder is the CEO Huajie Xie with 30% of shares outstanding. With 8.2% and 3.3% of the shares outstanding respectively, Jinxiang Pang and Jilin Province Technology Investment Fund Co., Ltd. are the second and third largest shareholders.

We did some more digging and found that 10 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 Jilin Joinature PolymerLtd

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. 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 insiders own a significant proportion of Jilin Joinature Polymer Co.,Ltd.. It has a market capitalization of just CN¥2.3b, and insiders have CN¥924m 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

With a 48% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Jilin Joinature PolymerLtd. 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

Our data indicates that Private Companies hold 5.5%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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 Jilin Joinature PolymerLtd is showing 2 warning signs in our investment analysis , and 1 of those can't be ignored...

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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