The recent 3.3% gain must have brightened CEO Wang Ying's week, RLX Technology Inc.'s (NYSE:RLX) most bullish insider

Key Insights

• Insiders appear to have a vested interest in RLX Technology's growth, as seen by their sizeable ownership
• The top 4 shareholders own 52% of the company
• 21% of RLX Technology is held by Institutions

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To get a sense of who is truly in control of RLX Technology Inc. (NYSE:RLX), it is important to understand the ownership structure of the business. With 52% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week’s 3.3% gain.

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

See our latest analysis for RLX Technology

What Does The Institutional Ownership Tell Us About RLX Technology?

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.

RLX 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of RLX Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in RLX Technology. The company's CEO Wang Ying is the largest shareholder with 25% of shares outstanding. In comparison, the second and third largest shareholders hold about 12% and 7.7% of the stock. Note that two of the top three shareholders are also Top Key Executive and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.

After doing some more digging, we found that the top 4 shareholders control more than half of the company's shares which essentially means that there is concentrated ownership amongst the top shareholders, most of whom happen to be insiders!

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 RLX Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 most recent data indicates that insiders own the majority of RLX Technology Inc.. This means they can collectively make decisions for the company. Insiders own US$1.2b worth of shares in the US$2.3b company. That's extraordinary! Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over RLX Technology. 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 RLX Technology better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with RLX Technology .

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.