Could The JinkoSolar Holding Co., Ltd. (NYSE:JKS) Ownership Structure Tell Us Something Useful?

By
Simply Wall St
Published
April 09, 2022
NYSE:JKS
Source: Shutterstock

The big shareholder groups in JinkoSolar Holding Co., Ltd. (NYSE:JKS) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

With a market capitalization of US$2.3b, JinkoSolar Holding is a decent size, so it is probably on the radar of institutional investors. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about JinkoSolar Holding.

Check out our latest analysis for JinkoSolar Holding

ownership-breakdown
NYSE:JKS Ownership Breakdown April 9th 2022

What Does The Institutional Ownership Tell Us About JinkoSolar Holding?

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 JinkoSolar Holding does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 JinkoSolar Holding's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NYSE:JKS Earnings and Revenue Growth April 9th 2022

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. JinkoSolar Holding is not owned by hedge funds. The company's largest shareholder is Schroder Investment Management (Hong Kong) Limited, with ownership of 10%. For context, the second largest shareholder holds about 8.7% of the shares outstanding, followed by an ownership of 6.3% by the third-largest shareholder. Two of the top three shareholders happen to be Chief Executive Officer and Member of the Board of Directors, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 10 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of JinkoSolar Holding

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.

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 a reasonable proportion of JinkoSolar Holding Co., Ltd.. It has a market capitalization of just US$2.3b, and insiders have US$414m worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 22% stake in JinkoSolar Holding. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 4.8%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand JinkoSolar Holding better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for JinkoSolar Holding you should be aware of, and 1 of them is potentially serious.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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