After the recent decline, Jiangsu Lettall Electronic Co.,Ltd (SHSE:603629) CEO Shuwei Shao's holdings have lost 5.7% of their value

Key Insights

• Jiangsu Lettall ElectronicLtd's significant insider ownership suggests inherent interests in company's expansion
• A total of 3 investors have a majority stake in the company with 53% ownership
• Institutional ownership in Jiangsu Lettall ElectronicLtd is 11%

To get a sense of who is truly in control of Jiangsu Lettall Electronic Co.,Ltd (SHSE:603629), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders as a group endured the highest losses after market cap fell by CN¥371m.

In the chart below, we zoom in on the different ownership groups of Jiangsu Lettall ElectronicLtd.

View our latest analysis for Jiangsu Lettall ElectronicLtd

What Does The Institutional Ownership Tell Us About Jiangsu Lettall ElectronicLtd?

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.

Jiangsu Lettall ElectronicLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Jiangsu Lettall ElectronicLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Jiangsu Lettall ElectronicLtd. With a 40% stake, CEO Shuwei Shao is the largest shareholder. For context, the second largest shareholder holds about 7.4% of the shares outstanding, followed by an ownership of 4.9% by the third-largest shareholder. Interestingly, the second-largest shareholder, Qiuping Shao is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. 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 Lettall ElectronicLtd

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.

Our most recent data indicates that insiders own the majority of Jiangsu Lettall Electronic Co.,Ltd. This means they can collectively make decisions for the company. So they have a CN¥3.1b stake in this CN¥6.1b 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

With a 34% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Jiangsu Lettall ElectronicLtd. 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

We can see that Private Companies own 4.1%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Jiangsu Lettall ElectronicLtd is showing 3 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.