Key Insights

• Insiders appear to have a vested interest in Henan Jindan Lactic Acid TechnologyLtd's growth, as seen by their sizeable ownership
• 51% of the business is held by the top 5 shareholders
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of Henan Jindan Lactic Acid Technology Co.,Ltd. (SZSE:300829) can tell us which group is most powerful. With 46% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week's 15% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Henan Jindan Lactic Acid TechnologyLtd.

What Does The Institutional Ownership Tell Us About Henan Jindan Lactic Acid TechnologyLtd?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Since institutions own only a small portion of Henan Jindan Lactic Acid TechnologyLtd, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. 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.

We note that hedge funds don't have a meaningful investment in Henan Jindan Lactic Acid TechnologyLtd. Pengdan Zhang is currently the company's largest shareholder with 33% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.4% and 5.3% of the stock. Additionally, the company's CEO Peixing Yu directly holds 3.6% of the total shares outstanding.

On looking further, we found that 51% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Henan Jindan Lactic Acid TechnologyLtd

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Henan Jindan Lactic Acid Technology Co.,Ltd.. It has a market capitalization of just CN¥3.1b, and insiders have CN¥1.4b worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 39% stake in the company, and hence can't easily be ignored. 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.

Private Equity Ownership

With an ownership of 12%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Henan Jindan Lactic Acid TechnologyLtd better, we need to consider many other factors. For instance, we've identified 3 warning signs for Henan Jindan Lactic Acid TechnologyLtd (2 are a bit concerning) that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.