Recent 10% pullback would hurt Jiangsu Allfavor Intelligent Circuits Technology CO.,Ltd (SZSE:300964) insiders

Key Insights

• Jiangsu Allfavor Intelligent Circuits TechnologyLtd's significant insider ownership suggests inherent interests in company's expansion
• 52% of the business is held by the top 3 shareholders
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Jiangsu Allfavor Intelligent Circuits Technology CO.,Ltd (SZSE:300964) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 43% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to CN¥2.6b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Jiangsu Allfavor Intelligent Circuits TechnologyLtd, beginning with the chart below.

Check out our latest analysis for Jiangsu Allfavor Intelligent Circuits TechnologyLtd

What Does The Institutional Ownership Tell Us About Jiangsu Allfavor Intelligent Circuits 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.

Institutions have a very small stake in Jiangsu Allfavor Intelligent Circuits TechnologyLtd. 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.

We note that hedge funds don't have a meaningful investment in Jiangsu Allfavor Intelligent Circuits TechnologyLtd. Xiaojun Dong is currently the largest shareholder, with 25% of shares outstanding. For context, the second largest shareholder holds about 20% of the shares outstanding, followed by an ownership of 7.1% by the third-largest shareholder. Guoxiong Zhou, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Additionally, the company's CEO Peilai Jiang directly holds 6.9% of the total shares outstanding.

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 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 Jiangsu Allfavor Intelligent Circuits TechnologyLtd

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems insiders own a significant proportion of Jiangsu Allfavor Intelligent Circuits Technology CO.,Ltd. Insiders have a CN¥1.1b stake in this CN¥2.6b 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

With a 34% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Jiangsu Allfavor Intelligent Circuits TechnologyLtd. 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

It seems that Private Companies own 20%, of the Jiangsu Allfavor Intelligent Circuits TechnologyLtd stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Jiangsu Allfavor Intelligent Circuits TechnologyLtd has 4 warning signs (and 2 which are a bit unpleasant) we think you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.