Suzhou Wanxiang Technology Co.,Ltd (SZSE:301180) CEO Jun Huang, the company's largest shareholder sees 8.0% reduction in holdings value

Key Insights

• Insiders appear to have a vested interest in Suzhou Wanxiang TechnologyLtd's growth, as seen by their sizeable ownership
• A total of 2 investors have a majority stake in the company with 66% ownership
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Suzhou Wanxiang Technology Co.,Ltd (SZSE:301180), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 79% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 8.0% decline in share price, insiders suffered the most losses.

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

View our latest analysis for Suzhou Wanxiang TechnologyLtd

What Does The Institutional Ownership Tell Us About Suzhou Wanxiang 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.

Since institutions own only a small portion of Suzhou Wanxiang TechnologyLtd, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in Suzhou Wanxiang TechnologyLtd. With a 37% stake, CEO Jun Huang is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 29% and 12%, of the shares outstanding, respectively. Interestingly, the second and third-largest shareholders also happen to be the Senior Key Executive and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Suzhou Wanxiang TechnologyLtd

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.

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 Suzhou Wanxiang Technology Co.,Ltd. This gives them effective control of the company. So they have a CN¥4.4b stake in this CN¥5.6b business. 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 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Suzhou Wanxiang 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

It seems that Private Companies own 3.5%, of the Suzhou Wanxiang TechnologyLtd stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 3 warning signs for Suzhou Wanxiang TechnologyLtd (1 is significant!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.