Key Insights

• Jinfa Labi Maternity & Baby Articles' significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 53% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Jinfa Labi Maternity & Baby Articles Co., Ltd (SZSE:002762) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 55% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥379m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Jinfa Labi Maternity & Baby Articles.

What Does The Institutional Ownership Tell Us About Jinfa Labi Maternity & Baby Articles?

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.

Less than 5% of Jinfa Labi Maternity & Baby Articles 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 company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Hedge funds don't have many shares in Jinfa Labi Maternity & Baby Articles. Hao Liang Lin is currently the company's largest shareholder with 27% of shares outstanding. Ruo Wen Lin is the second largest shareholder owning 26% of common stock, and Xun Chen holds about 0.6% of the company stock. Ruo Wen Lin, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.

To make our study more interesting, we found that the top 2 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 Jinfa Labi Maternity & Baby Articles

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

It seems that insiders own more than half the Jinfa Labi Maternity & Baby Articles Co., Ltd stock. This gives them a lot of power. That means they own CN¥1.3b worth of shares in the CN¥2.4b company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 44% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Jinfa Labi Maternity & Baby Articles. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Jinfa Labi Maternity & Baby Articles better, we need to consider many other factors. For example, we've discovered 3 warning signs for Jinfa Labi Maternity & Baby Articles (1 is a bit concerning!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.