Stock Analysis

Is Jilin Jiutai Rural Commercial Bank Corporation Limited (HKG:6122) Popular Amongst Insiders?

SEHK:6122
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Every investor in Jilin Jiutai Rural Commercial Bank Corporation Limited (HKG:6122) should be aware of the most powerful shareholder groups. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Jilin Jiutai Rural Commercial Bank has a market capitalization of HK$11b, so we would expect some institutional investors to have noticed the stock. In the chart below, we can see that institutions are not really that prevalent on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about Jilin Jiutai Rural Commercial Bank.

Check out our latest analysis for Jilin Jiutai Rural Commercial Bank

ownership-breakdown
SEHK:6122 Ownership Breakdown December 9th 2020

What Does The Institutional Ownership Tell Us About Jilin Jiutai Rural Commercial Bank?

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.

Since institutions own only a small portion of Jilin Jiutai Rural Commercial Bank, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. 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.

earnings-and-revenue-growth
SEHK:6122 Earnings and Revenue Growth December 9th 2020

Hedge funds don't have many shares in Jilin Jiutai Rural Commercial Bank. The company's largest shareholder is Jilin Province Trust & Investment Co., Ltd., with ownership of 9.6%. In comparison, the second and third largest shareholders hold about 8.2% and 4.5% of the stock.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 14 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Jilin Jiutai Rural Commercial Bank

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 Jilin Jiutai Rural Commercial Bank Corporation Limited. This is a big company, so it is good to see this level of alignment. Insiders own HK$761m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

With a 45% ownership, the general public have some degree of sway over Jilin Jiutai Rural Commercial Bank. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 43%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Jilin Jiutai Rural Commercial Bank better, we need to consider many other factors. Be aware that Jilin Jiutai Rural Commercial Bank is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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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