Stock Analysis

Following a 35% decline over last year, recent gains may please Baozun Inc. (NASDAQ:BZUN) institutional owners

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NasdaqGS:BZUN
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A look at the shareholders of Baozun Inc. (NASDAQ:BZUN) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 58% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Last week's US$55m market cap gain would probably be appreciated by institutional investors, especially after a year of 35% losses.

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

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ownership-breakdown
NasdaqGS:BZUN Ownership Breakdown January 25th 2023

What Does The Institutional Ownership Tell Us About Baozun?

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.

We can see that Baozun does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Baozun's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqGS:BZUN Earnings and Revenue Growth January 25th 2023

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in Baozun. Alibaba Group Holding Limited is currently the largest shareholder, with 15% of shares outstanding. With 7.1% and 6.3% of the shares outstanding respectively, Schroder Investment Management (Singapore) Ltd and Wenbin Qiu are the second and third largest shareholders. Wenbin Qiu, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

We did some more digging and found that 9 of the top shareholders account for roughly 52% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Baozun

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Shareholders would probably be interested to learn that insiders own shares in Baozun Inc.. In their own names, insiders own US$42m worth of stock in the US$464m company. Some would say this shows alignment of interests between shareholders and the board. 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 18% stake in Baozun. 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

Public companies currently own 16% of Baozun stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

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. Case in point: We've spotted 1 warning sign for Baozun you should be aware of.

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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