Chengdu Jiafaantai Education Technology Co.,Ltd.'s (SZSE:300559) market cap increased by CN¥422m, insiders receive a 47% cut

Key Insights

• Significant insider control over Chengdu Jiafaantai Education TechnologyLtd implies vested interests in company growth
• A total of 4 investors have a majority stake in the company with 53% ownership
• Institutional ownership in Chengdu Jiafaantai Education TechnologyLtd is 20%

Every investor in Chengdu Jiafaantai Education Technology Co.,Ltd. (SZSE:300559) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 47% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders were the biggest beneficiaries of last week’s 8.3% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Chengdu Jiafaantai Education TechnologyLtd.

See our latest analysis for Chengdu Jiafaantai Education TechnologyLtd

What Does The Institutional Ownership Tell Us About Chengdu Jiafaantai Education TechnologyLtd?

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 Chengdu Jiafaantai Education TechnologyLtd does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Chengdu Jiafaantai Education TechnologyLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Chengdu Jiafaantai Education TechnologyLtd. Bin Yuan is currently the company's largest shareholder with 30% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.2% and 7.9%, of the shares outstanding, respectively.

On looking further, we found that 53% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Chengdu Jiafaantai Education TechnologyLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Our information suggests that insiders maintain a significant holding in Chengdu Jiafaantai Education Technology Co.,Ltd.. Insiders have a CN¥2.6b stake in this CN¥5.5b business. 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 24% 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 Company Ownership

We can see that Private Companies own 7.2%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for Chengdu Jiafaantai Education TechnologyLtd that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.