Individual investors invested in Jiangsu Liance Electromechanical Technology Co., Ltd. (SHSE:688113) copped the brunt of last week's CN¥214m market cap decline

Key Insights

• Significant control over Jiangsu Liance Electromechanical Technology by individual investors implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 9 shareholders
• Insider ownership in Jiangsu Liance Electromechanical Technology is 44%

Every investor in Jiangsu Liance Electromechanical Technology Co., Ltd. (SHSE:688113) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 48% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of individual investors took a hit after last week’s 10% price drop, insiders with their 44% also suffered.

In the chart below, we zoom in on the different ownership groups of Jiangsu Liance Electromechanical Technology.

See our latest analysis for Jiangsu Liance Electromechanical Technology

What Does The Institutional Ownership Tell Us About Jiangsu Liance Electromechanical Technology?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Jiangsu Liance Electromechanical Technology does have institutional investors; and they hold a good portion of the company's stock. 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 Liance Electromechanical Technology's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Jiangsu Liance Electromechanical Technology. Our data shows that Aiguo Zhao is the largest shareholder with 14% of shares outstanding. For context, the second largest shareholder holds about 7.5% of the shares outstanding, followed by an ownership of 6.8% by the third-largest shareholder. Two of the top three shareholders happen to be Senior Key Executive and Member of the Board of Directors, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.

We did some more digging and found that 9 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 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 Liance Electromechanical Technology

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 information suggests that insiders maintain a significant holding in Jiangsu Liance Electromechanical Technology Co., Ltd.. It has a market capitalization of just CN¥1.8b, and insiders have CN¥806m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 48% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Jiangsu Liance Electromechanical Technology. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Jiangsu Liance Electromechanical Technology better, we need to consider many other factors. Be aware that Jiangsu Liance Electromechanical Technology is showing 2 warning signs in our investment analysis , and 1 of those can't be ignored...

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.