Xuancheng Valin Precision Technology Co., Ltd. (SHSE:603356) surges 13%; retail investors who own 57% shares profited along with insiders

Key Insights

• The considerable ownership by retail investors in Xuancheng Valin Precision Technology indicates that they collectively have a greater say in management and business strategy
• A total of 24 investors have a majority stake in the company with 43% ownership
• Insider ownership in Xuancheng Valin Precision Technology is 25%

Every investor in Xuancheng Valin Precision Technology Co., Ltd. (SHSE:603356) should be aware of the most powerful shareholder groups. With 57% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While retail investors were the group that reaped the most benefits after last week’s 13% price gain, insiders also received a 25% cut.

In the chart below, we zoom in on the different ownership groups of Xuancheng Valin Precision Technology.

Check out our latest analysis for Xuancheng Valin Precision Technology

What Does The Institutional Ownership Tell Us About Xuancheng Valin Precision Technology?

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.

As you can see, institutional investors have a fair amount of stake in Xuancheng Valin Precision Technology. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Xuancheng Valin Precision Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Xuancheng Valin Precision Technology is not owned by hedge funds. Yehua Huang is currently the company's largest shareholder with 18% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.7% and 2.9%, of the shares outstanding, respectively.

On studying our ownership data, we found that 24 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Xuancheng Valin Precision Technology

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 Xuancheng Valin Precision Technology Co., Ltd.. Insiders have a CN¥439m stake in this CN¥1.7b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 57% stake in Xuancheng Valin Precision Technology, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

It seems that Private Companies own 10%, of the Xuancheng Valin Precision Technology stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Xuancheng Valin Precision Technology better, we need to consider many other factors. Take risks for example - Xuancheng Valin Precision Technology has 2 warning signs we think you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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