Key Insights

• Significant insider control over JNBY Design implies vested interests in company growth
• The top 2 shareholders own 63% of the company
• Insiders have been selling lately

A look at the shareholders of JNBY Design Limited (HKG:3306) can tell us which group is most powerful. The group holding the most number of shares in the company, around 63% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

Even though insiders have sold shares recently, the group owns the most numbers of shares in the company. As a result, the group bore the brunt of last week's HK$875m market cap loss.

In the chart below, we zoom in on the different ownership groups of JNBY Design.

What Does The Institutional Ownership Tell Us About JNBY Design?

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.

JNBY Design already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 JNBY Design's earnings history below. Of course, the future is what really matters.

JNBY Design is not owned by hedge funds. From our data, we infer that the largest shareholder is Lin Li (who also holds the title of Senior Key Executive) with 32% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. With 30% and 3.3% of the shares outstanding respectively, Jian Wu and Energetic Design Limited are the second and third largest shareholders. Interestingly, the second-largest shareholder, Jian Wu is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders. Furthermore, CEO Huating Wu is the owner of 0.8% of the company's shares.

To make our study more interesting, we found that the top 2 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of JNBY Design

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

Our information suggests that insiders own more than half of JNBY Design Limited. This gives them effective control of the company. That means they own HK$4.8b worth of shares in the HK$7.5b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 23% stake in JNBY Design. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 3.3%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand JNBY Design better, we need to consider many other factors. For instance, we've identified 2 warning signs for JNBY Design that you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.