Key Insights
- ZJLD Group's significant insider ownership suggests inherent interests in company's expansion
- The largest shareholder of the company is Xiangdong Wu with a 67% stake
- Insiders have been selling lately
To get a sense of who is truly in control of ZJLD Group Inc (HKG:6979), it is important to understand the ownership structure of the business. With 69% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Despite recent sales, insiders own the most shares in the company. As a result, they stand to gain the most after the stock gained 3.3% in the past week.
In the chart below, we zoom in on the different ownership groups of ZJLD Group.
Check out our latest analysis for ZJLD Group
What Does The Institutional Ownership Tell Us About ZJLD Group?
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.
Since institutions own only a small portion of ZJLD Group, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.
We note that hedge funds don't have a meaningful investment in ZJLD Group. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In ZJLD Group's case, its Top Key Executive, Xiangdong Wu, is the largest shareholder, holding 67% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 13% and 1.8%, of the shares outstanding, respectively. Interestingly, the third-largest shareholder, Kwong Chue Ng is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.
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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of ZJLD Group
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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our most recent data indicates that insiders own the majority of ZJLD Group Inc. This means they can collectively make decisions for the company. That means insiders have a very meaningful HK$15b stake in this HK$23b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 16% 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
With a stake of 13%, private equity firms could influence the ZJLD Group board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 3 warning signs for ZJLD Group you should be aware of, and 1 of them makes us a bit uncomfortable.
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.