Suzhou Recodeal Interconnect System Co.,Ltd's (SHSE:688800) top holders are insiders and they are likely disappointed by the recent 5.0% drop

Key Insights

• Insiders appear to have a vested interest in Suzhou Recodeal Interconnect SystemLtd's growth, as seen by their sizeable ownership
• 50% of the business is held by the top 9 shareholders
• 18% of Suzhou Recodeal Interconnect SystemLtd is held by Institutions

If you want to know who really controls Suzhou Recodeal Interconnect System Co.,Ltd (SHSE:688800), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 38% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥8.4b 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 Suzhou Recodeal Interconnect SystemLtd, beginning with the chart below.

View our latest analysis for Suzhou Recodeal Interconnect SystemLtd

What Does The Institutional Ownership Tell Us About Suzhou Recodeal Interconnect SystemLtd?

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.

Suzhou Recodeal Interconnect SystemLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Suzhou Recodeal Interconnect SystemLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Suzhou Recodeal Interconnect SystemLtd. Shijun Wu is currently the company's largest shareholder with 29% of shares outstanding. Bo Huang is the second largest shareholder owning 6.3% of common stock, and CAS Investment Management Co., Ltd. holds about 3.6% of the company stock. Bo Huang, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive.

We also observed that the top 9 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. 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 Suzhou Recodeal Interconnect SystemLtd

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.

Our most recent data indicates that insiders own a reasonable proportion of Suzhou Recodeal Interconnect System Co.,Ltd. It is very interesting to see that insiders have a meaningful CN¥3.2b stake in this CN¥8.4b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 38% stake in Suzhou Recodeal Interconnect SystemLtd. 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

We can see that Private Companies own 3.6%, of the shares on issue. 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 Suzhou Recodeal Interconnect SystemLtd better, we need to consider many other factors. Be aware that Suzhou Recodeal Interconnect SystemLtd is showing 2 warning signs in our investment analysis , and 1 of those is significant...

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.