Wuxi Autowell Technology Co.,Ltd.'s (SHSE:688516) most bullish insider, CEO Zhiyong Ge must be pleased with the recent 6.6% gain

Key Insights

• Wuxi Autowell TechnologyLtd's significant insider ownership suggests inherent interests in company's expansion
• A total of 4 investors have a majority stake in the company with 52% ownership
• Institutional ownership in Wuxi Autowell TechnologyLtd is 20%

To get a sense of who is truly in control of Wuxi Autowell Technology Co.,Ltd. (SHSE:688516), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 47% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit CN¥13b market cap following a 6.6% gain in the stock.

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

See our latest analysis for Wuxi Autowell TechnologyLtd

What Does The Institutional Ownership Tell Us About Wuxi Autowell TechnologyLtd?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Wuxi Autowell TechnologyLtd 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. 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 Autowell TechnologyLtd'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 Autowell TechnologyLtd. Looking at our data, we can see that the largest shareholder is the CEO Zhiyong Ge with 27% of shares outstanding. Wen Li is the second largest shareholder owning 18% of common stock, and Wuxi Aochuang Investment Partnership Enterprise (Limited Partnership) holds about 4.2% of the company stock. Interestingly, the second-largest shareholder, Wen Li is also Chief Technology Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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 Autowell 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. 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.

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 Autowell Technology Co.,Ltd.. It has a market capitalization of just CN¥13b, and insiders have CN¥6.1b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 26% stake in Wuxi Autowell 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.

Private Company Ownership

Our data indicates that Private Companies hold 7.3%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Wuxi Autowell TechnologyLtd better, we need to consider many other factors. Be aware that Wuxi Autowell TechnologyLtd is showing 2 warning signs in our investment analysis , and 1 of those is significant...

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