Key Insights

• Jiangsu Rijiu Optoelectronics' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 18 investors have a majority stake in the company with 44% ownership
• 28% of Jiangsu Rijiu Optoelectronics is held by insiders

If you want to know who really controls Jiangsu Rijiu Optoelectronics Jointstock Co., Ltd (SZSE:003015), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 56% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 18% increase in the stock price last week, individual investors profited the most, but insiders who own 28% stock also stood to gain from the increase.

Let's delve deeper into each type of owner of Jiangsu Rijiu Optoelectronics, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Jiangsu Rijiu Optoelectronics?

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.

As you can see, institutional investors have a fair amount of stake in Jiangsu Rijiu Optoelectronics. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Jiangsu Rijiu Optoelectronics' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Jiangsu Rijiu Optoelectronics. With a 27% stake, CEO Chao Chen is the largest shareholder. With 4.0% and 3.1% of the shares outstanding respectively, Qilu Zhongtai Private Equity Fund Co., Ltd. and First State Cinda Fund Management Company Limited are the second and third largest shareholders.

On studying our ownership data, we found that 18 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Jiangsu Rijiu Optoelectronics

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 insiders own a significant proportion of Jiangsu Rijiu Optoelectronics Jointstock Co., Ltd. It has a market capitalization of just CN¥2.7b, and insiders have CN¥776m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 56% of Jiangsu Rijiu Optoelectronics shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Jiangsu Rijiu Optoelectronics better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Jiangsu Rijiu Optoelectronics (of which 1 is a bit concerning!) you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com