Activist company

Insiders at JS Global Lifestyle Company Limited (HKG:1691) must be appalled at the latest 7.3% drop after buying recently

If you want to know who actually controls JS Global Lifestyle Company Limited (HKG:1691), then you will need to look at the composition of its share register. And the group that holds the biggest slice of the pie are individual insiders with 62% ownership. That is, the group will benefit the most if the stock goes up (or lose the most if there is a downturn).

And looking at our data, we can see that insiders have been buying stocks recently. Their expectations, however, were not met as the market capitalization fell to HK$27 billion over the past week.

In the table below, we zoom in on the different JS Global Lifestyle ownership groups.

Check out our latest analysis for JS Global Lifestyle

SEHK: 1691 Ownership Breakdown May 29, 2022

What does institutional ownership tell us about JS Global Lifestyle?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.

As you can see, institutional investors hold a sizeable share of JS Global Lifestyle. This may indicate that the company has some degree of credibility in the investment community. However, it is better to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see JS Global Lifestyle’s historical revenue and earnings below, but keep in mind there’s always more to the story.

SEHK: 1691 Earnings and Revenue Growth May 29, 2022

Hedge funds don’t have a lot of shares in JS Global Lifestyle. The company’s CEO, Xuning Wang, is the largest shareholder with 57% of the outstanding shares. With such a large stake, we infer that they have significant control over the future of the company. It is generally considered a good sign when insiders hold a significant number of shares in the company, and in this case, we are happy to see a company insider with such skin in the game. With respectively 6.1% and 4.8% of the outstanding shares, CDH Investment Management Company Limited and Mark Rosenzweig are the second and third shareholders.

Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the feelings of the analyst. There are plenty of analysts covering the stock, so it might be interesting to see what they are predicting as well.

JS Global Lifestyle Insider Ownership

The definition of an insider may differ slightly from country to country, but board members still matter. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.

It appears that insiders own more than half of the shares of JS Global Lifestyle Company Limited. It gives them a lot of power. Given that it has a market capitalization of HK$27 billion, that means insiders have a whopping HK$17 billion worth of shares in their own name. Most would be delighted to see the board investing alongside them. You might want to find out if they bought or sold.

General public property

The general public, including retail investors, owns 18% of the company’s capital and therefore cannot be easily ignored. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.

Private equity ownership

The private equity firms hold a 6.1% stake in JS Global Lifestyle. This suggests that they can influence key policy decisions. This might appeal to some, because private equity is sometimes an activist who holds management accountable. But other times, the private equity sells off, after taking the company public.

Next steps:

I find it very interesting to see who exactly owns a business. But to really get insight, we also need to consider other information. To this end, you should be aware of the 2 warning signs we spotted with JS Global Lifestyle.

But finally it’s the future, not the past, which will determine the performance of the owners of this company. Therefore, we think it’s advisable to take a look at this free report showing whether analysts are predicting a brighter future.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.