Jiaze Renewables Corporation Limited's (SHSE:601619) stock price dropped 6.2% last week; private companies would not be happy

Key Insights

• The considerable ownership by private companies in Jiaze Renewables indicates that they collectively have a greater say in management and business strategy
• 52% of the business is held by the top 5 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Jiaze Renewables Corporation Limited (SHSE:601619) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private companies with 46% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 6.2% decline in share price, private companies suffered the most losses.

Let's delve deeper into each type of owner of Jiaze Renewables, beginning with the chart below.

Check out our latest analysis for Jiaze Renewables

What Does The Institutional Ownership Tell Us About Jiaze Renewables?

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.

We can see that Jiaze Renewables does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Jiaze Renewables, (below). Of course, keep in mind that there are other factors to consider, too.

Jiaze Renewables is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Beijing Jiashi Longbo Investment Management Co., Ltd. with 16% of shares outstanding. For context, the second largest shareholder holds about 14% of the shares outstanding, followed by an ownership of 10% by the third-largest shareholder.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Jiaze Renewables

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

Shareholders would probably be interested to learn that insiders own shares in Jiaze Renewables Corporation Limited. The insiders have a meaningful stake worth CN¥211m. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 37% 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 Equity Ownership

With a stake of 7.8%, private equity firms could influence the Jiaze Renewables board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

It seems that Private Companies own 46%, of the Jiaze Renewables stock. 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. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Jiaze Renewables you should know about.

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.