With 69% ownership, Johnson Electric Holdings Limited (HKG:179) insiders have a lot riding on the company's future

Key Insights

• Johnson Electric Holdings' significant insider ownership suggests inherent interests in company's expansion
• The largest shareholder of the company is Yik-Chun Wang Koo with a 65% stake
• Institutional ownership in Johnson Electric Holdings is 16%

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If you want to know who really controls Johnson Electric Holdings Limited (HKG:179), 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 individual insiders with 69% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

So it follows, every decision made by insiders of Johnson Electric Holdings regarding the company's future would be crucial to them.

In the chart below, we zoom in on the different ownership groups of Johnson Electric Holdings.

Check out our latest analysis for Johnson Electric Holdings

What Does The Institutional Ownership Tell Us About Johnson Electric Holdings?

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.

As you can see, institutional investors have a fair amount of stake in Johnson Electric Holdings. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Johnson Electric Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Johnson Electric Holdings. Yik-Chun Wang Koo is currently the company's largest shareholder with 65% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Kin-Chung Wang is the second largest shareholder owning 3.1% of common stock, and Schroder Investment Management (Singapore) Ltd. holds about 3.1% of the company stock.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Johnson Electric Holdings

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.

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.

Our most recent data indicates that insiders own the majority of Johnson Electric Holdings Limited. This means they can collectively make decisions for the company. Given it has a market cap of HK$28b, that means insiders have a whopping HK$20b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public-- including retail investors -- own 15% 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Johnson Electric Holdings better, we need to consider many other factors.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.