Wuxi Xuelang Environmental Technology Co., Ltd.'s (SZSE:300385) market cap surged CN¥160m last week, retail investors who have a lot riding on the company were rewarded

Key Insights

• Significant control over Wuxi Xuelang Environmental Technology by retail investors implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 3 shareholders
• Insiders own 21% of Wuxi Xuelang Environmental Technology

To get a sense of who is truly in control of Wuxi Xuelang Environmental Technology Co., Ltd. (SZSE:300385), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 44% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, retail investors collectively scored the highest last week as the company hit CN¥1.3b market cap following a 14% gain in the stock.

Let's delve deeper into each type of owner of Wuxi Xuelang Environmental Technology, beginning with the chart below.

See our latest analysis for Wuxi Xuelang Environmental Technology

What Does The Institutional Ownership Tell Us About Wuxi Xuelang Environmental Technology?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Institutions have a very small stake in Wuxi Xuelang Environmental Technology. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Wuxi Xuelang Environmental Technology is not owned by hedge funds. Siensol Environmental Protection Industry Group Co.,Ltd is currently the largest shareholder, with 30% of shares outstanding. In comparison, the second and third largest shareholders hold about 17% and 3.3% of the stock.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Wuxi Xuelang Environmental 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in Wuxi Xuelang Environmental Technology Co., Ltd.. It has a market capitalization of just CN¥1.3b, and insiders have CN¥279m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 44% stake in Wuxi Xuelang Environmental Technology. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

It seems that Private Companies own 30%, of the Wuxi Xuelang Environmental Technology stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Wuxi Xuelang Environmental Technology , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.