Kunshan Dongwei Technology Co.,Ltd. (SHSE:688700) CEO Jianbo Liu's holdings dropped 9.1% in value as a result of the recent pullback

Key Insights

• Insiders appear to have a vested interest in Kunshan Dongwei TechnologyLtd's growth, as seen by their sizeable ownership
• The top 6 shareholders own 50% of the company
• Institutions own 17% of Kunshan Dongwei TechnologyLtd

If you want to know who really controls Kunshan Dongwei Technology Co.,Ltd. (SHSE:688700), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to CN¥9.5b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Kunshan Dongwei TechnologyLtd, beginning with the chart below.

Check out our latest analysis for Kunshan Dongwei TechnologyLtd

What Does The Institutional Ownership Tell Us About Kunshan Dongwei TechnologyLtd?

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 Kunshan Dongwei TechnologyLtd. 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. 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 Kunshan Dongwei TechnologyLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Kunshan Dongwei TechnologyLtd. Looking at our data, we can see that the largest shareholder is the CEO Jianbo Liu with 31% of shares outstanding. For context, the second largest shareholder holds about 5.1% of the shares outstanding, followed by an ownership of 4.4% by the third-largest shareholder. Interestingly, the third-largest shareholder, Zhiguo Xiao is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Kunshan Dongwei TechnologyLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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.

It seems that insiders own more than half the Kunshan Dongwei Technology Co.,Ltd. stock. This gives them a lot of power. Insiders own CN¥4.8b worth of shares in the CN¥9.5b company. That's extraordinary! It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 28% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kunshan Dongwei TechnologyLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 4.2%, of the Kunshan Dongwei TechnologyLtd 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Kunshan Dongwei TechnologyLtd has 3 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

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.