Jiangxi Hengda Hi-Tech Co.,Ltd.'s (SZSE:002591) market cap rose CN¥174m last week; individual investors who hold 54% profited and so did insiders

Key Insights

• Significant control over Jiangxi Hengda Hi-TechLtd by individual investors implies that the general public has more power to influence management and governance-related decisions
• 46% of the business is held by the top 24 shareholders
• Insider ownership in Jiangxi Hengda Hi-TechLtd is 37%

If you want to know who really controls Jiangxi Hengda Hi-Tech Co.,Ltd. (SZSE:002591), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual investors with 54% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While individual investors were the group that reaped the most benefits after last week’s 13% price gain, insiders also received a 37% cut.

In the chart below, we zoom in on the different ownership groups of Jiangxi Hengda Hi-TechLtd.

Check out our latest analysis for Jiangxi Hengda Hi-TechLtd

What Does The Institutional Ownership Tell Us About Jiangxi Hengda Hi-TechLtd?

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.

Jiangxi Hengda Hi-TechLtd 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 Jiangxi Hengda Hi-TechLtd's earnings history below. Of course, the future is what really matters.

Jiangxi Hengda Hi-TechLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Xinghe Zhu with 22% of shares outstanding. For context, the second largest shareholder holds about 15% of the shares outstanding, followed by an ownership of 1.2% by the third-largest shareholder. Enxue Hu, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

On studying our ownership data, we found that 24 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Jiangxi Hengda Hi-TechLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 most recent data indicates that insiders own a reasonable proportion of Jiangxi Hengda Hi-Tech Co.,Ltd.. Insiders have a CN¥567m stake in this CN¥1.5b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 54% stake in Jiangxi Hengda Hi-TechLtd, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Jiangxi Hengda Hi-TechLtd 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 Jiangxi Hengda Hi-TechLtd , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.