Retail investors invested in Joinn Laboratories(China)Co.,Ltd. (SHSE:603127) copped the brunt of last week's CN¥388m market cap decline

Key Insights

• Joinn Laboratories(China)Co.Ltd's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 13 investors have a majority stake in the company with 51% ownership
• Insiders own 39% of Joinn Laboratories(China)Co.Ltd

A look at the shareholders of Joinn Laboratories(China)Co.,Ltd. (SHSE:603127) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 42% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders who own 39% came under pressure after market cap dropped to CN¥9.2b last week,retail investors took the most losses.

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

Check out 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.

As you can see, institutional investors have a fair amount of stake in Joinn Laboratories(China)Co.Ltd. 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. 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 Joinn Laboratories(China)Co.Ltd, (below). Of course, keep in mind that there are other factors to consider, too.

Joinn Laboratories(China)Co.Ltd is not owned by hedge funds. 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 22% of shares outstanding. With 10% and 3.2% of the shares outstanding respectively, Zhi Wen Zhou and Zhong Ou Fund Management Co., Ltd are the second and third largest shareholders.

A closer look at our ownership figures suggests that the top 13 shareholders have a combined ownership of 51% implying that 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. 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

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Joinn Laboratories(China)Co.,Ltd.. Insiders own CN¥3.6b worth of shares in the CN¥9.2b company. That's quite meaningful. 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

The general public-- including retail investors -- own 42% 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for Joinn Laboratories(China)Co.Ltd you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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