Key Insights

• Significant control over Jiangxi Guoguang Commercial Chains by private companies implies that the general public has more power to influence management and governance-related decisions
• Jiangxi Guoguang Industrial Co., Ltd. owns 51% of the company
• Insiders own 36% of Jiangxi Guoguang Commercial Chains

To get a sense of who is truly in control of Jiangxi Guoguang Commercial Chains Co., Ltd. (SHSE:605188), it is important to understand the ownership structure of the business. With 53% stake, private companies 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.

Private companies gained the most after market cap touched CN¥3.4b last week, while insiders who own 36% also benefitted.

Let's delve deeper into each type of owner of Jiangxi Guoguang Commercial Chains, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Jiangxi Guoguang Commercial Chains?

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.

Less than 5% of Jiangxi Guoguang Commercial Chains 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 Jiangxi Guoguang Commercial Chains. Jiangxi Guoguang Industrial Co., Ltd. is currently the company's largest shareholder with 51% of shares outstanding. This implies that they have majority interest control of the future of the company. With 17% and 8.7% of the shares outstanding respectively, Jingen Hu and Shulan Jiang are the second and third largest shareholders. Shulan Jiang, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. In addition, we found that Zhichao Hu, the CEO has 4.4% of the shares allocated to their name.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Jiangxi Guoguang Commercial Chains

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Jiangxi Guoguang Commercial Chains Co., Ltd.. Insiders own CN¥1.2b worth of shares in the CN¥3.4b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 10% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 53%, of the Jiangxi Guoguang Commercial Chains stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Jiangxi Guoguang Commercial Chains (at least 2 which can't be ignored) , and understanding them should be part of your investment process.

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.