Joinn Laboratories(China)Co.,Ltd.'s (SHSE:603127) stock price dropped 3.7% last week; individual investors would not be happy

Key Insights

• Joinn Laboratories(China)Co.Ltd's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 11 investors have a majority stake in the company with 50% ownership
• Insider ownership in Joinn Laboratories(China)Co.Ltd is 40%

To get a sense of who is truly in control of Joinn Laboratories(China)Co.,Ltd. (SHSE:603127), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 40% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of individual investors took a hit after last week’s 3.7% price drop, insiders with their 40% also suffered.

Let's take a closer look to see what the different types of shareholders can tell us about Joinn Laboratories(China)Co.Ltd.

See our latest analysis for Joinn Laboratories(China)Co.Ltd

What Does The Institutional Ownership Tell Us About Joinn Laboratories(China)Co.Ltd?

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.

Joinn Laboratories(China)Co.Ltd 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 Joinn Laboratories(China)Co.Ltd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Joinn Laboratories(China)Co.Ltd. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Joinn Laboratories(China)Co.Ltd's case, its Top Key Executive, Yuxia Feng, is the largest shareholder, holding 23% of shares outstanding. Zhi Wen Zhou is the second largest shareholder owning 10% of common stock, and Zhong Ou Fund Management Co., Ltd holds about 3.3% of the company stock.

After doing some more digging, we found that the top 11 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Joinn Laboratories(China)Co.Ltd

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 Joinn Laboratories(China)Co.,Ltd.. It is very interesting to see that insiders have a meaningful CN¥5.8b stake in this CN¥15b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Joinn Laboratories(China)Co.Ltd. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Joinn Laboratories(China)Co.Ltd better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Joinn Laboratories(China)Co.Ltd you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.