CEO Yuguo Chen, JH Educational Technology INC.'s (HKG:1935) largest shareholder sees value of holdings go down 8.5% after recent drop

By
Simply Wall St
Published
March 15, 2022
SEHK:1935
Source: Shutterstock

Every investor in JH Educational Technology INC. (HKG:1935) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 75% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, insiders endured the biggest losses as the stock fell by 8.5%.

Let's delve deeper into each type of owner of JH Educational Technology, beginning with the chart below.

Check out our latest analysis for JH Educational Technology

ownership-breakdown
SEHK:1935 Ownership Breakdown March 15th 2022

What Does The Lack Of Institutional Ownership Tell Us About JH Educational Technology?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of JH Educational Technology, for yourself, below.

earnings-and-revenue-growth
SEHK:1935 Earnings and Revenue Growth March 15th 2022

We note that hedge funds don't have a meaningful investment in JH Educational Technology. The company's CEO Yuguo Chen is the largest shareholder with 24% of shares outstanding. The second and third largest shareholders are Lingfeng Chen and Shu Chen, with an equal amount of shares to their name at 13%. Note that two of the top three shareholders are also Senior Key Executive and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of JH Educational Technology

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.

Our most recent data indicates that insiders own the majority of JH Educational Technology INC.. This means they can collectively make decisions for the company. That means they own HK$3.6b worth of shares in the HK$4.9b company. That's quite meaningful. 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 24% stake in JH Educational Technology. 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.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that JH Educational Technology is showing 1 warning sign in our investment analysis , you should know about...

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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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