JinXianDai Information Industry Co.,Ltd.'s (SZSE:300830) last week's 15% decline must have disappointed retail investors who have a significant stake

Key Insights

• Significant control over JinXianDai Information IndustryLtd by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 21 investors have a majority stake in the company with 48% ownership
• Insider ownership in JinXianDai Information IndustryLtd is 40%

Every investor in JinXianDai Information Industry Co.,Ltd. (SZSE:300830) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 52% 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 insiders, who own 40% shares weren’t spared from last week’s CN¥430m market cap drop, retail investors as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of JinXianDai Information IndustryLtd.

Check out our latest analysis for JinXianDai Information IndustryLtd

What Does The Institutional Ownership Tell Us About JinXianDai Information IndustryLtd?

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.

Institutions have a very small stake in JinXianDai Information IndustryLtd. 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.

Hedge funds don't have many shares in JinXianDai Information IndustryLtd. With a 35% stake, CEO Feng Li is the largest shareholder. For context, the second largest shareholder holds about 4.8% of the shares outstanding, followed by an ownership of 2.6% by the third-largest shareholder.

A deeper look at our ownership data shows that the top 21 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of JinXianDai Information IndustryLtd

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.

It seems insiders own a significant proportion of JinXianDai Information Industry Co.,Ltd.. Insiders have a CN¥996m 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 52% of JinXianDai Information IndustryLtd 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.

Private Company Ownership

Our data indicates that Private Companies hold 5.7%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 4 warning signs for JinXianDai Information IndustryLtd you should be aware of, and 1 of them can't be ignored.

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.