Key Insights

• The considerable ownership by retail investors in Baozun indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 12 shareholders
• Insiders own 28% of Baozun

If you want to know who really controls Baozun Inc. (NASDAQ:BZUN), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 43% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Meanwhile, institutions make up 29% of the company’s shareholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.

Let's take a closer look to see what the different types of shareholders can tell us about Baozun.

Check out our latest analysis for Baozun

What Does The Institutional Ownership Tell Us About Baozun?

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

As you can see, institutional investors have a fair amount of stake in Baozun. 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. 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 Baozun's historic earnings and revenue below, but keep in mind there's always more to the story.

Baozun is not owned by hedge funds. The company's largest shareholder is Jun Wang, with ownership of 15%. In comparison, the second and third largest shareholders hold about 9.5% and 7.1% of the stock. Wenbin Qiu, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 12 shareholders, meaning that no single shareholder has a majority interest in the ownership.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Baozun

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our information suggests that insiders maintain a significant holding in Baozun Inc.. It has a market capitalization of just US$143m, and insiders have US$41m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 43% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Baozun better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Baozun you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

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

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.