The recent pullback must have dismayed Wuxi Paike New Materials Technology Co.,Ltd. (SHSE:605123) insiders who own 59% of the company

Key Insights

• Wuxi Paike New Materials TechnologyLtd's significant insider ownership suggests inherent interests in company's expansion
• 53% of the business is held by the top 2 shareholders
• Institutions own 17% of Wuxi Paike New Materials TechnologyLtd

Every investor in Wuxi Paike New Materials Technology Co.,Ltd. (SHSE:605123) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 59% 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¥7.1b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's take a closer look to see what the different types of shareholders can tell us about Wuxi Paike New Materials TechnologyLtd.

See our latest analysis for Wuxi Paike New Materials TechnologyLtd

What Does The Institutional Ownership Tell Us About Wuxi Paike New Materials TechnologyLtd?

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.

As you can see, institutional investors have a fair amount of stake in Wuxi Paike New Materials 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. 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 Wuxi Paike New Materials TechnologyLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Wuxi Paike New Materials TechnologyLtd is not owned by hedge funds. Our data shows that Liping Zong is the largest shareholder with 33% of shares outstanding. With 20% and 5.0% of the shares outstanding respectively, Yufeng Shi and Hongtao Zang are the second and third largest shareholders. Yufeng Shi, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.

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

Insider Ownership Of Wuxi Paike New Materials 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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders own more than half of Wuxi Paike New Materials Technology Co.,Ltd.. This gives them effective control of the company. So they have a CN¥4.2b stake in this CN¥7.1b 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 20% stake in Wuxi Paike New Materials TechnologyLtd. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Wuxi Paike New Materials TechnologyLtd better, we need to consider many other factors. For instance, we've identified 1 warning sign for Wuxi Paike New Materials TechnologyLtd that you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com