Shenzhen JPT Opto-Electronics Co., Ltd.'s (SHSE:688025) recent 8.9% pullback adds to one-year year losses, institutional owners may take drastic measures

Key Insights

• Institutions' substantial holdings in Shenzhen JPT Opto-Electronics implies that they have significant influence over the company's share price
• The top 6 shareholders own 51% of the company
• 27% of Shenzhen JPT Opto-Electronics is held by insiders

If you want to know who really controls Shenzhen JPT Opto-Electronics Co., Ltd. (SHSE:688025), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 31% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And so it follows that institutional investors was the group most impacted after the company's market cap fell to CN¥3.8b last week after a 8.9% drop in the share price. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 36% for shareholders. Also referred to as "smart money", institutions have a lot of sway over how a stock's price moves. As a result, if the downtrend continues, institutions may face pressures to sell Shenzhen JPT Opto-Electronics, which might have negative implications on individual investors.

In the chart below, we zoom in on the different ownership groups of Shenzhen JPT Opto-Electronics.

See our latest analysis for Shenzhen JPT Opto-Electronics

What Does The Institutional Ownership Tell Us About Shenzhen JPT Opto-Electronics?

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.

As you can see, institutional investors have a fair amount of stake in Shenzhen JPT Opto-Electronics. 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 Shenzhen JPT Opto-Electronics' earnings history below. Of course, the future is what really matters.

Shenzhen JPT Opto-Electronics is not owned by hedge funds. Huang Zhijia is currently the largest shareholder, with 24% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 14% and 4.3%, of the shares outstanding, respectively. Additionally, the company's CEO Jian Liu directly holds 3.2% of the total shares outstanding.

We did some more digging and found that 6 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. 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 Shenzhen JPT Opto-Electronics

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.

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.

It seems insiders own a significant proportion of Shenzhen JPT Opto-Electronics Co., Ltd.. It has a market capitalization of just CN¥3.8b, and insiders have CN¥1.0b worth of shares in their own names. 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, who are usually individual investors, hold a 28% stake in Shenzhen JPT Opto-Electronics. 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 14%, of the shares on issue. 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 Shenzhen JPT Opto-Electronics better, we need to consider many other factors. For instance, we've identified 1 warning sign for Shenzhen JPT Opto-Electronics that you should be aware of.

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.