Key Insights
Investors in Jinglu Environmental Technology Limited (SZSE:001230) should be aware of the most powerful shareholder groups. With an ownership of 54%, we can see that individual insiders own the vast majority of the company’s shares. This means that this group stands to gain the most if the share price rises (or lose the most if the share price falls).
Clearly, it was insiders who benefited the most after the company’s market capitalization increased by RMB192 million last week.
The chart below zooms in on the different ownership groups at Jinglv Environmental Science and Technology.
Check out our latest analysis on Kyoryoku Environmental Science and Technology
SZSE:001230 Ownership Breakdown July 28, 2024
What does institutional ownership say about Jinglv Environmental Science and Technology?
Many institutions measure their performance against an index that approximates the local market, so they usually pay particular attention to companies that are included in major indexes.
We can see that Jinglu Environmental Technology has institutional investors, who hold a significant percentage of the company’s shares. This suggests that there is some credibility among professional investors. However, we can’t rely on this fact alone, as, like everyone, institutional investors make bad investments sometimes. It’s not uncommon to see a big share price drop when two large institutional investors try to sell a stock at the same time. It’s therefore worth checking the past earnings trajectory of Jinglu Environmental Technology (below). Of course, remember that there are other factors to consider, too.
SZSE:001230 Revenue and Sales Growth July 28, 2024
It should be noted that hedge funds don’t have a significant investment in Jinglv Environment Science and Technology. Looking at our data, we can see that the largest shareholder is the CEO, Xiaoxia Yu, with 21% of shares outstanding. The second and third largest shareholders are Xiaojuan Yu and Hongbo Yu, holding 15% of shares each. We note that two of the top three shareholders are also Senior Key Officers and Directors, respectively. This again indicates high ownership by company insiders.
After further investigation, we found that the top three shareholders collectively control more than half of the company’s shares, implying that they have considerable power to influence the company’s decisions.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiment to know which way the wind is blowing. As far as we can tell, there is no analyst coverage of the company, which suggests it’s probably flying under the radar.
Insider Ownership of Kyoryoku Environmental Science and Technology
The definition of an insider varies slightly between countries, but members of the board of directors always count. Management are ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the executive board, especially if they are founders or CEOs.
While most view insider ownership as a positive because it can indicate the board is well aligned with other shareholders, in some cases it can lead to too much power being concentrated in one group.
Our information indicates that insiders own more than half of Jinglv Environmental Science and Technology Co., Ltd.’s shares. This gives them effective control over the company. This means that they own RMB1.1b worth of shares in a company worth RMB2b, which is very meaningful. It’s good to see this level of investment. You can see if these insiders have been buying recently here.
General public property
The general public, typically retail investors, own 27% of Jinglv Environmental Science and Technology, and while this group doesn’t necessarily have the decision-making power, it can certainly have a real influence on how the company is run.
Private Ownership
Our data shows that private companies hold 5.6% of the company’s shares. It may be worth investigating this further. If related parties (such as insiders) have an interest in these private companies, they should disclose it in the annual report. It is also possible that private companies have a strategic interest in the company.
Next steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important – consider the ever-present threat of investment risk, for example. We’ve identified 1 warning sign with Jinglv Environmental Science and Technology, and understanding these should be part of your investment process.
Of course, it may not be the best stock to buy, so we suggest you take a look at this free collection of interesting up-and-coming stocks with favorable financials.
Note: The figures in this article are calculated using data from the last 12 months, which refers to the 12-month period ending on the last day of the month in which the financial statements are dated, which may not match the figures in the annual report.
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This article by Simply Wall St is of general nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell a stock, and does not take into account your objectives or financial situation. We aim to provide long-term analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned herein.
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