Insiders were the biggest winners as Wuhu Fuchun Dye and Weave Co.,Ltd.'s (SHSE:605189) market cap grew by CN¥288m last week

Key Insights

• Insiders appear to have a vested interest in Wuhu Fuchun Dye and WeaveLtd's growth, as seen by their sizeable ownership
• The largest shareholder of the company is Peifu He with a 52% stake
• 12% of Wuhu Fuchun Dye and WeaveLtd is held by Institutions

To get a sense of who is truly in control of Wuhu Fuchun Dye and Weave Co.,Ltd. (SHSE:605189), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 58% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders were the biggest beneficiaries of last week’s 17% gain.

In the chart below, we zoom in on the different ownership groups of Wuhu Fuchun Dye and WeaveLtd.

View our latest analysis for Wuhu Fuchun Dye and WeaveLtd

What Does The Institutional Ownership Tell Us About Wuhu Fuchun Dye and WeaveLtd?

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.

We can see that Wuhu Fuchun Dye and WeaveLtd does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Wuhu Fuchun Dye and WeaveLtd's earnings history below. Of course, the future is what really matters.

Wuhu Fuchun Dye and WeaveLtd is not owned by hedge funds. Peifu He is currently the largest shareholder, with 52% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 5.7% and 5.2% of the shares outstanding respectively, Shiqi Yu and Wuhu Fuchun Venture Capital Partnership Enterprise (Limited Partnership) are the second and third largest shareholders. Shiqi Yu, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Wuhu Fuchun Dye and WeaveLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own the majority of Wuhu Fuchun Dye and Weave Co.,Ltd.. This means they can collectively make decisions for the company. Given it has a market cap of CN¥2.0b, that means they have CN¥1.2b worth of shares. 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-- including retail investors -- own 20% stake in the company, and hence can't easily be ignored. 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

Our data indicates that Private Companies hold 10%, of the company's shares. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Wuhu Fuchun Dye and WeaveLtd (of which 2 can't be ignored!) 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.

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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.