Insiders the biggest winners as Jiangsu Hongde Special Parts Co.,Ltd.'s (SZSE:301163) market cap rises to CN¥1.8b

Key Insights

• Insiders appear to have a vested interest in Jiangsu Hongde Special PartsLtd's growth, as seen by their sizeable ownership
• The largest shareholder of the company is Jinde Yang with a 54% stake
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of Jiangsu Hongde Special Parts Co.,Ltd. (SZSE:301163) can tell us which group is most powerful. The group holding the most number of shares in the company, around 62% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders scored the highest last week as the company hit CN¥1.8b market cap following a 12% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Jiangsu Hongde Special PartsLtd.

See our latest analysis for Jiangsu Hongde Special PartsLtd

What Does The Institutional Ownership Tell Us About Jiangsu Hongde Special PartsLtd?

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.

Institutions have a very small stake in Jiangsu Hongde Special PartsLtd. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. 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 Jiangsu Hongde Special PartsLtd. Jinde Yang is currently the company's largest shareholder with 54% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Beijing Datuyang Investment Management Center (Limited Partnership) is the second largest shareholder owning 4.6% of common stock, and Jian Li holds about 2.5% of the company stock.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Jiangsu Hongde Special PartsLtd

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.

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.

Our most recent data indicates that insiders own the majority of Jiangsu Hongde Special Parts Co.,Ltd.. This means they can collectively make decisions for the company. So they have a CN¥1.1b stake in this CN¥1.8b business. 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-- including retail investors -- own 27% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 6.6%, 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Jiangsu Hongde Special PartsLtd (at least 1 which is potentially serious) , and understanding them should be part of your investment process.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com