JHT Design Co.,Ltd.'s (SHSE:603061) market cap up CN¥425m last week, benefiting both retail investors who own 41% as well as insiders

Key Insights

• The considerable ownership by retail investors in JHT DesignLtd indicates that they collectively have a greater say in management and business strategy
• A total of 6 investors have a majority stake in the company with 52% ownership
• 24% of JHT DesignLtd is held by insiders

To get a sense of who is truly in control of JHT Design Co.,Ltd. (SHSE:603061), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 41% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While retail investors were the group that benefitted the most from last week’s CN¥425m market cap gain, insiders too had a 24% share in those profits.

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

Check out our latest analysis for JHT DesignLtd

What Does The Institutional Ownership Tell Us About JHT DesignLtd?

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.

We can see that JHT DesignLtd does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 JHT DesignLtd's earnings history below. Of course, the future is what really matters.

JHT DesignLtd is not owned by hedge funds. With a 15% stake, CEO Xuefeng Cui is the largest shareholder. The second and third largest shareholders are Shanghai Xunuo Equity Investment Fund Partnership Enterprise (L.P.) and Bo Long, with an equal amount of shares to their name at 9.2%. Interestingly, the third-largest shareholder, Bo Long is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of JHT DesignLtd

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 a reasonable proportion of JHT Design Co.,Ltd.. Insiders own CN¥1.1b worth of shares in the CN¥4.7b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 41% stake in the company, and hence can't easily be ignored. 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.

Private Equity Ownership

With an ownership of 21%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

Our data indicates that Private Companies hold 6.8%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand JHT DesignLtd better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with JHT DesignLtd , and understanding them should be part of your investment process.

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.