Jilin Jiutai Rural Commercial Bank Corporation Limited's (HKG:6122) stock price dropped 15% last week; retail investors would not be happy

Key Insights

• Significant control over Jilin Jiutai Rural Commercial Bank by retail investors implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 19 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of Jilin Jiutai Rural Commercial Bank Corporation Limited (HKG:6122) can tell us which group is most powerful. The group holding the most number of shares in the company, around 50% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, retail investors as a group endured the highest losses last week after market cap fell by HK$863m.

In the chart below, we zoom in on the different ownership groups of Jilin Jiutai Rural Commercial Bank.

View our latest analysis for Jilin Jiutai Rural Commercial Bank

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

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.

Less than 5% of Jilin Jiutai Rural Commercial Bank is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Jilin Jiutai Rural Commercial Bank is not owned by hedge funds. Jilin Province Trust & Investment Co., Ltd. is currently the company's largest shareholder with 9.6% of shares outstanding. Changchun Huaxing Construction Co., Ltd. is the second largest shareholder owning 8.2% of common stock, and Changchun Huamei Tourism And Culture Media Co.,Ltd holds about 4.6% of the company stock.

Our studies suggest that the top 19 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Jilin Jiutai Rural Commercial Bank

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 some shares in Jilin Jiutai Rural Commercial Bank Corporation Limited. It has a market capitalization of just HK$4.9b, and insiders have HK$293m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public -- including retail investors -- own 50% of Jilin Jiutai Rural Commercial Bank. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

It seems that Private Companies own 39%, of the Jilin Jiutai Rural Commercial Bank stock. 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. Take risks for example - Jilin Jiutai Rural Commercial Bank has 1 warning sign we think you should be aware of.

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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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.

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