Wuhu Fuchun Dye and Weave Co.,Ltd.'s (SHSE:605189) top holders are insiders and they are likely disappointed by the recent 12% drop

Key Insights

• Significant insider control over Wuhu Fuchun Dye and WeaveLtd implies vested interests in company growth
• 51% of the business is held by the top 2 shareholders
• Institutions own 13% of Wuhu Fuchun Dye and WeaveLtd

A look at the shareholders of Wuhu Fuchun Dye and Weave Co.,Ltd. (SHSE:605189) can tell us which group is most powerful. The group holding the most number of shares in the company, around 52% 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¥1.6b 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 Wuhu Fuchun Dye and WeaveLtd, beginning with the chart below.

View our latest analysis for Wuhu Fuchun Dye and WeaveLtd

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

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.

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 suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Wuhu Fuchun Dye and WeaveLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Wuhu Fuchun Dye and WeaveLtd is not owned by hedge funds. Peifu He is currently the company's largest shareholder with 46% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.6% and 5.2%, of the shares outstanding, respectively. Shiqi Yu, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 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.

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 information suggests that insiders own more than half of Wuhu Fuchun Dye and Weave Co.,Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥1.6b, that means they have CN¥844m worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Wuhu Fuchun Dye and WeaveLtd. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 10%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Wuhu Fuchun Dye and WeaveLtd better, we need to consider many other factors. Take risks for example - Wuhu Fuchun Dye and WeaveLtd has 4 warning signs (and 2 which don't sit too well with us) we think you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.