JNBY Design Limited's (HKG:3306) most bullish insider, Senior Key Executive Lin Li must be pleased with the recent 8.9% gain

Key Insights

• JNBY Design's significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 63% ownership
• Institutions own 11% of JNBY Design

If you want to know who really controls JNBY Design Limited (HKG:3306), then you'll have to look at the makeup of its share registry. With 64% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week’s 8.9% gain.

In the chart below, we zoom in on the different ownership groups of JNBY Design.

Check out our latest analysis for JNBY Design

What Does The Institutional Ownership Tell Us About JNBY Design?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

JNBY Design already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 JNBY Design's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in JNBY Design. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In JNBY Design's case, its Senior Key Executive, Lin Li, is the largest shareholder, holding 32% of shares outstanding. For context, the second largest shareholder holds about 30% of the shares outstanding, followed by an ownership of 3.3% by the third-largest shareholder. Interestingly, the second-largest shareholder, Jian Wu is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders. Additionally, the company's CEO Huating Wu directly holds 1.0% of the total shares outstanding.

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.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

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 most recent data indicates that insiders own the majority of JNBY Design Limited. This means they can collectively make decisions for the company. Given it has a market cap of HK$6.6b, that means they have HK$4.2b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 22% stake in JNBY Design. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

It seems that Private Companies own 3.3%, of the JNBY Design 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 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 would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.