Stock Analysis

Insiders of JNBY Design Limited (HKG:3306) have had a great week after last week's HK$462m gain and they haven't stopped buying

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SEHK:3306
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A look at the shareholders of JNBY Design Limited (HKG:3306) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 65% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Our data shows that insiders recently bought shares in the company and they were rewarded after market cap rose HK$462m last week.

Let's take a closer look to see what the different types of shareholders can tell us about JNBY Design.

Our analysis indicates that 3306 is potentially undervalued!

ownership-breakdown
SEHK:3306 Ownership Breakdown November 17th 2022

What Does The Institutional Ownership Tell Us About JNBY Design?

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.

We can see that JNBY Design does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 JNBY Design's historic earnings and revenue below, but keep in mind there's always more to the story.

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SEHK:3306 Earnings and Revenue Growth November 17th 2022

JNBY Design is not owned by hedge funds. From our data, we infer that the largest shareholder is Lin Li (who also holds the title of Senior Key Executive) with 33% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. With 31% and 4.7% of the shares outstanding respectively, Jian Wu and Energetic Design Limited are the second and third largest shareholders. Interestingly, the second-largest shareholder, Jian Wu is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders. In addition, we found that Huating Wu, the CEO has 0.8% of the shares allocated to their name.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of JNBY Design

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders own more than half of JNBY Design Limited. This gives them effective control of the company. That means they own HK$2.4b worth of shares in the HK$3.7b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 21% stake in JNBY Design. 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 4.7%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand JNBY Design better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for JNBY Design you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

Valuation is complex, but we're helping make it simple.

Find out whether JNBY Design is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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