JinFu Technology Co., Ltd.'s (SZSE:003018) market cap increased by CN¥395m, insiders receive a 65% cut

Key Insights

• Insiders appear to have a vested interest in JinFu Technology's growth, as seen by their sizeable ownership
• Wanru Chen owns 64% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in JinFu Technology Co., Ltd. (SZSE:003018) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 65% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit CN¥2.9b market cap following a 15% gain in the stock.

Let's delve deeper into each type of owner of JinFu Technology, beginning with the chart below.

View our latest analysis for JinFu Technology

What Does The Institutional Ownership Tell Us About JinFu Technology?

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 JinFu Technology does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 JinFu Technology, (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 JinFu Technology. Wanru Chen is currently the company's largest shareholder with 64% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. The second and third largest shareholders are Dongguan Jingai Investment Partnership Enterprise (Limited Partnership) and Dongguan Beisheng Investment Partnership Enterprise (Limited Partnership), with an equal amount of shares to their name at 2.9%.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of JinFu Technology

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.

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 JinFu Technology Co., Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥2.9b, that means they have CN¥1.9b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over JinFu Technology. 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. Be aware that JinFu Technology is showing 2 warning signs in our investment analysis , and 1 of those is significant...

Of course this may not be the best stock to buy. So take a peek at this free 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.