Key Insights

• The considerable ownership by private equity firms in Shenzhen Injoinic TechnologyLtd indicates that they collectively have a greater say in management and business strategy
• The top 3 shareholders own 58% of the company
• Institutional ownership in Shenzhen Injoinic TechnologyLtd is 16%

Every investor in Shenzhen Injoinic Technology Co.,Ltd. (SHSE:688209) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 39% to be precise, is private equity firms. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 10% decline in share price, private equity firms suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Shenzhen Injoinic TechnologyLtd.

What Does The Institutional Ownership Tell Us About Shenzhen Injoinic 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.

We can see that Shenzhen Injoinic TechnologyLtd does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Shenzhen Injoinic TechnologyLtd's earnings history below. Of course, the future is what really matters.

Shenzhen Injoinic TechnologyLtd is not owned by hedge funds. Our data shows that Zhuhai Yingji Investment Partnership Enterprise (Limited Partnership) is the largest shareholder with 25% of shares outstanding. For context, the second largest shareholder holds about 25% of the shares outstanding, followed by an ownership of 8.4% by the third-largest shareholder. Furthermore, CEO Hongwei Huang is the owner of 1.1% of the company's shares.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence 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. 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 Shenzhen Injoinic TechnologyLtd

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. 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.

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.

Shareholders would probably be interested to learn that insiders own shares in Shenzhen Injoinic Technology Co.,Ltd.. It has a market capitalization of just CN¥4.5b, and insiders have CN¥112m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 11% 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 Equity Ownership

Private equity firms hold a 39% stake in Shenzhen Injoinic TechnologyLtd. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

Our data indicates that Private Companies hold 31%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also 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 for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Shenzhen Injoinic TechnologyLtd (at least 1 which shouldn't be ignored) , and understanding them should be part of your investment process.

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.

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