Hubei Xiangyuan New Material Technology Inc.'s (SZSE:300980) market cap rose CN¥385m last week; individual investors who hold 48% profited and so did insiders

Key Insights

• Hubei Xiangyuan New Material Technology's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 8 shareholders own 50% of the company
• Insiders own 40% of Hubei Xiangyuan New Material Technology

To get a sense of who is truly in control of Hubei Xiangyuan New Material Technology Inc. (SZSE:300980), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 48% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While individual investors were the group that reaped the most benefits after last week’s 12% price gain, insiders also received a 40% cut.

Let's delve deeper into each type of owner of Hubei Xiangyuan New Material Technology, beginning with the chart below.

Check out our latest analysis for Hubei Xiangyuan New Material Technology

What Does The Institutional Ownership Tell Us About Hubei Xiangyuan New Material 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.

Hubei Xiangyuan New Material Technology 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 Hubei Xiangyuan New Material Technology'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 Hubei Xiangyuan New Material Technology. Zhixiang Wei is currently the largest shareholder, with 24% of shares outstanding. With 16% and 3.2% of the shares outstanding respectively, Qiong Wei and Hubei Provincial High Technology Industry Investment Group Co., Ltd. are the second and third largest shareholders. Qiong Wei, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Hubei Xiangyuan New Material Technology

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 maintain a significant holding in Hubei Xiangyuan New Material Technology Inc.. Insiders own CN¥1.4b worth of shares in the CN¥3.6b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 48% stake in Hubei Xiangyuan New Material Technology. 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.

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. Case in point: We've spotted 4 warning signs for Hubei Xiangyuan New Material Technology you should be aware of.

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.