Key Insights

• Insiders appear to have a vested interest in WuXi Xinje ElectricLtd's growth, as seen by their sizeable ownership
• The top 4 shareholders own 57% of the company
• Institutions own 25% of WuXi Xinje ElectricLtd

If you want to know who really controls WuXi Xinje Electric Co.,Ltd. (SHSE:603416), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 62% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥402m last week.

In the chart below, we zoom in on the different ownership groups of WuXi Xinje ElectricLtd.

What Does The Institutional Ownership Tell Us About WuXi Xinje ElectricLtd?

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.

As you can see, institutional investors have a fair amount of stake in WuXi Xinje ElectricLtd. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at WuXi Xinje ElectricLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in WuXi Xinje ElectricLtd. The company's CEO Xin Li is the largest shareholder with 23% of shares outstanding. Tingli Liu is the second largest shareholder owning 12% of common stock, and Jun Yu holds about 11% of the company stock.

Our research also brought to light the fact that roughly 57% 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of WuXi Xinje ElectricLtd

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders own more than half of WuXi Xinje Electric Co.,Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥5.2b, that means they have CN¥3.2b worth of shares. 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

The general public-- including retail investors -- own 13% stake in the company, and hence can't easily be ignored. 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 WuXi Xinje ElectricLtd better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with WuXi Xinje ElectricLtd , and understanding them should be part of your investment process.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.