Public companies invested in JD Health International Inc. (HKG:6618) copped the brunt of last week's HK$19b market cap decline

Key Insights

• The considerable ownership by public companies in JD Health International indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is JD.com, Inc. with a 67% stake
• Institutional ownership in JD Health International is 12%

A look at the shareholders of JD Health International Inc. (HKG:6618) can tell us which group is most powerful. The group holding the most number of shares in the company, around 67% to be precise, is public companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, public companies endured the biggest losses as the stock fell by 17%.

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

See our latest analysis for JD Health International

What Does The Institutional Ownership Tell Us About JD Health International?

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.

JD Health International already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of JD Health International, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in JD Health International. The company's largest shareholder is JD.com, Inc., with ownership of 67%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Krane Funds Advisors, LLC is the second largest shareholder owning 1.7% of common stock, and The Vanguard Group, Inc. holds about 1.3% 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of JD Health International

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. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our data suggests that insiders own under 1% of JD Health International Inc. in their own names. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own HK$266m of stock. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 20% stake in JD Health International. 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.

Public Company Ownership

It appears to us that public companies own 67% of JD Health International. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

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

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

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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.