Individual investors invested in Nanjing Julong Science & Technology Co.,LTD (SZSE:300644) up 14% last week, insiders too were rewarded

Key Insights

• Significant control over Nanjing Julong Science & TechnologyLTD 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 25 shareholders
• Insider ownership in Nanjing Julong Science & TechnologyLTD is 33%

If you want to know who really controls Nanjing Julong Science & Technology Co.,LTD (SZSE:300644), 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 50% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While individual investors were the group that benefitted the most from last week’s CN¥309m market cap gain, insiders too had a 33% share in those profits.

Let's take a closer look to see what the different types of shareholders can tell us about Nanjing Julong Science & TechnologyLTD.

See our latest analysis for Nanjing Julong Science & TechnologyLTD

What Does The Institutional Ownership Tell Us About Nanjing Julong Science & TechnologyLTD?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Since institutions own only a small portion of Nanjing Julong Science & TechnologyLTD, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

We note that hedge funds don't have a meaningful investment in Nanjing Julong Science & TechnologyLTD. Shuyang Liu is currently the company's largest shareholder with 20% of shares outstanding. With 15% and 8.6% of the shares outstanding respectively, Jiangsu Sainty Corp., Ltd. and Jingsong Wu are the second and third largest shareholders. Jingsong Wu, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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

Insider Ownership Of Nanjing Julong Science & TechnologyLTD

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 information suggests that insiders maintain a significant holding in Nanjing Julong Science & Technology Co.,LTD. Insiders have a CN¥838m stake in this CN¥2.5b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 50% of Nanjing Julong Science & TechnologyLTD shares. 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.

Public Company Ownership

Public companies currently own 15% of Nanjing Julong Science & TechnologyLTD stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Nanjing Julong Science & TechnologyLTD has 1 warning sign we think you should be aware of.

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.