ZJLD Group Inc (HKG:6979) insiders have significant skin in the game with 69% ownership

Key Insights

• Insiders appear to have a vested interest in ZJLD Group's growth, as seen by their sizeable ownership
• Xiangdong Wu owns 67% of the company
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

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To get a sense of who is truly in control of ZJLD Group Inc (HKG:6979), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 69% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

So, insiders of ZJLD Group have a lot at stake and every decision they make on the company’s future is important to them from a financial point of view.

Let's delve deeper into each type of owner of ZJLD Group, beginning with the chart below.

Check out our latest analysis for ZJLD Group

What Does The Institutional Ownership Tell Us About ZJLD Group?

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.

Less than 5% of ZJLD Group 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. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

ZJLD Group is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In ZJLD Group's case, its Top Key Executive, Xiangdong Wu, is the largest shareholder, holding 67% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 13% and 1.8%, of the shares outstanding, respectively.

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

Insider Ownership Of ZJLD Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 most recent data indicates that insiders own the majority of ZJLD Group Inc. This means they can collectively make decisions for the company. Given it has a market cap of HK$27b, that means insiders have a whopping HK$19b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over ZJLD Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With an ownership of 13%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that ZJLD Group is showing 2 warning signs in our investment analysis , and 1 of those is potentially serious...

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.

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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.