Private companies among Jiangxi Welgao Electronics Co., Ltd.'s (SZSE:301251) largest shareholders, saw gain in holdings value after stock jumped 13% last week

Simply Wall St · 09/28 01:25

Key Insights

  • Significant control over Jiangxi Welgao Electronics by private companies implies that the general public has more power to influence management and governance-related decisions
  • 51% of the company is held by a single shareholder (Jian Jiarun Investment Co., Ltd.)
  • Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

To get a sense of who is truly in control of Jiangxi Welgao Electronics Co., Ltd. (SZSE:301251), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 58% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private companies were the biggest beneficiaries of last week’s 13% gain.

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

View our latest analysis for Jiangxi Welgao Electronics

ownership-breakdown
SZSE:301251 Ownership Breakdown September 28th 2024

What Does The Institutional Ownership Tell Us About Jiangxi Welgao Electronics?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Jiangxi Welgao Electronics 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 Jiangxi Welgao Electronics' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
SZSE:301251 Earnings and Revenue Growth September 28th 2024

Jiangxi Welgao Electronics is not owned by hedge funds. Jian Jiarun Investment Co., Ltd. is currently the largest shareholder, with 51% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 6.5% of the shares outstanding, followed by an ownership of 3.0% by the third-largest shareholder. Xing Chen, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

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

Insider Ownership Of Jiangxi Welgao Electronics

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. 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 some shares in Jiangxi Welgao Electronics Co., Ltd.. As individuals, the insiders collectively own CN¥331m worth of the CN¥3.5b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 25% stake in the company, and hence can't easily be ignored. 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 58%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

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

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.