Wuxi Boton Technology Co., Ltd.'s (SZSE:300031) market cap dropped CN¥366m last week; Individual investors bore the brunt

Key Insights

• Significant control over Wuxi Boton Technology by individual investors implies that the general public has more power to influence management and governance-related decisions
• 41% of the business is held by the top 25 shareholders
• Insiders own 22% of Wuxi Boton Technology

If you want to know who really controls Wuxi Boton Technology Co., Ltd. (SZSE:300031), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 57% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 5.6% decrease in the stock price last week, individual investors suffered the most losses, but insiders who own 22% stock also took a hit.

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

See our latest analysis for Wuxi Boton Technology

What Does The Institutional Ownership Tell Us About Wuxi Boton 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.

Wuxi Boton Technology already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Boton Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Wuxi Boton Technology. Looking at our data, we can see that the largest shareholder is the CEO Zhifang Bao with 20% of shares outstanding. With 1.9% and 1.6% of the shares outstanding respectively, ICBC Credit Suisse Asset Management Co., Ltd. and CICC Asset Management Department are the second and third largest shareholders.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Wuxi Boton Technology

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

It seems insiders own a significant proportion of Wuxi Boton Technology Co., Ltd.. It has a market capitalization of just CN¥6.2b, and insiders have CN¥1.4b 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 -- including retail investors -- own 57% of Wuxi Boton Technology. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Wuxi Boton Technology is showing 1 warning sign in our investment analysis , 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.

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

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