Every investor in Jiayuan International Group Limited (HKG:2768) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.
Jiayuan International Group isn't enormous, but it's not particularly small either. It has a market capitalization of HK$12b, which means it would generally expect to see some institutions on the share registry. Our analysis of the ownership of the company, below, shows that institutions don't own many shares in the company. We can zoom in on the different ownership groups, to learn more about Jiayuan International Group.
What Does The Institutional Ownership Tell Us About Jiayuan International 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.
Institutions have a very small stake in Jiayuan International Group. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.
Jiayuan International Group is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Tin Ching Shum with 57% of shares outstanding. This implies that they have majority interest control of the future of the company. The Vanguard Group, Inc. is the second largest shareholder owning 1.1% of common stock, and Union Capital Pte. Ltd holds about 0.6% of the company stock.
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 is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Jiayuan International Group
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 information suggests that insiders own more than half of Jiayuan International Group Limited. This gives them effective control of the company. Given it has a market cap of HK$12b, that means insiders have a whopping HK$7.1b worth of shares in their own names. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.
General Public Ownership
With a 39% ownership, the general public have some degree of sway over Jiayuan International Group. 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.
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Jiayuan International Group , and understanding them should be part of your investment process.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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. 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.
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